Accountants Shouldn't Be Doing Bookkeeping

I've been contributing to a very interesting thread over on LinkedIn this week that started with this; your CPA shouldn't do your bookkeeping. Their main priority is to help you with your taxes, not your business goals.

Cue a thread with a raft of opinions from accountants and bookkeepers, and I'm curious to know yours.

Here was my initial contribution to the topic:

"I agree that accountants shouldn't be doing bookkeeping but don't necessarily agree that they shouldn't be helping with business goals. Depending on the person, that's exactly what they should be helping with. Taxes are fast becoming the side hustle to advisory." 

As a general rule, accountants shouldn't be doing bookkeeping.  

Bookkeepers and accountants are each specialists in different areas. Most accountants don't know how to do bookkeeping, it's not the best use of their time, and as it's not their area of expertise anyway, why should they? 

To say that accountants don't know how to do bookkeeping might seem like a bold claim. But we see it all the time that most accountants don't seem to fully understand what bookkeeping involves, the breadth of tasks that we undertake and the value to a business.

As an example, one of my clients was recruiting for a senior bookkeeper position and inteviewed a Chartered Accountant for the role. He thought that the role would be across about 50 files per week and was stunned to learn that no, it would be about 5 or 6. He didn't understand what a bookkeeper actually does.

This is not intended to dis accountants. I have said this very thing to many accountants and they agree with me that accountants aren't bookkeepers. Bookkeepers love working with good accountants who get that bookkeeping is a different skill to accounting.

What do they mean? 

So, when an accounting practice says they offer bookkeeping services, are they actually just offering bank reconciliations, cash coding transactions from the bank feed? Or...

• Do they process and collect source documents checking those documents for GST?
• Do they check purchase orders against invoices to make sure what was received was what's been charged
• Do they manage accounts payable, entering multi-line item inventory bills, setting up inventory items so that the business can get relevant inventory and product tracking?
• Are they responsible for the invoicing and credit control and ollowing up on overdue accounts
• Do they process payroll? And if they do, do they process payroll correctly?
• Do they review internal systems and tech to ensure that business processes and software are efficient?

And so on and so on?   

The answer to all of this is usually no.

Bookkeeper Belinda Egan* said it best in the LinkedIn thread when she said "I’m not a CPA, don’t profess to have tax knowledge, thats not my specialty, but I can run rings around many accountants, CPA’s, on business operations, payroll and other business management."

Yes, this! 

Bookkeepers who also offer tax and advisory 

All this said, I do have some bookkeeping business clients who also offer tax and advisory services, or virtual CFO services, and that's because they themselves are extremely qualified to do so, or they have hired qualified people to perform those tasks.

This can actually be a lucrative business model because it starts with getting the bookkeeping right and then flows on to getting the taxes right, a job made infinitely easier due to the fact that the bookkeeping has been done well.

But I have yet to see this model in reverse, where an accounting practice offers bookkeeping services beyond the bank rec. That's not to say that they're not out there, but I haven't come across one yet. 

Bookkeepers and accountants each have areas of expertise and it's high time that bookkeepers are recognised and appreciated across the accounting and business world for theirs.

The good ones 

It's important to acknowledge that there are a lot of accountants who are fully aware of what a bookkeeper does and because of that they have no desire to get into that game. It's these people and firms that bookkeepers establish beautiful referral relatonships with, and professional respect whereby both parties work together synergistically for the benefit of their mutual clients.

This relationship between client, bookkeeper and accountant is a dream team scenario.

I wish these people were in the majority but they're not. Yet. 

I'm optimistic that in time this will change, and indeed since I have been in this industry I have seen a marked improvement with this.

Keen to hear your thoughts on this. What's your experience? Just hit reply.

Stephanie