Basic Accounting

The accounting profession is diverse. For most people a bookkeeper and accountant is considered to be the same. Some clients even refer to their highly trained accountants as their ” bookkeepers”.

This article has no intention to heap scorn on the professional bookkeeper. If anything, their work enables the accountant to prepare and finalize their assignments.
Bookkeepers are found everywhere, from small to large corporations, and in government departments.

I will not touch on the old debate of the differences of the bookkeeper and accountant, suffice to say that there are many synergies between the two professions. Depending on the size of the organizations, a bookkeeper could essentially perform an accountant’s job.

It is on the divergence on the two professions where most of the confusion sets in. A bookkeeper could have performed a vital function for a small business for years, but when professional reports, are required, the help of an accountant will have to be enlisted. Sometimes to the detriment of the loyal bookkeeper.

The training and education of bookkeepers is different from that of an accountant. Some people become bookkeepers without any studying. Others attend short courses at training colleges varying from six months to two years. In certain cases bookkeepers can opt for professional membership. Accountants training is prescribed by many statutory accounting bodies, and their training is substantially more involved, and different from a bookkeepers training.

For bookkeepers to assume that they can run and report on an organizations complete accounting system, is sheer arrogance. Bookkeepers expertise in balancing the checkbooks, reconciling the accounts and other functions is not sufficient. Keeping current with GAAP, GRAP and IFRS, is not known to be strength of bookkeepers.

The training that bookkeepers receive, do not equip them to deal with complex tax transactions and the disclosure of certain accounting items such as “Intangibles”.
Bookkeepers should preferably outsource these functions to experienced qualified accountants. It happens very reluctantly.

The accounting industry is a very “selfish” industry. Unlike the medical or legal fraternity, we reluctantly share work or assignments. A medical doctor, when consulted, will not hesitate to refer patient to a specialist or another doctor. The same goes for attorneys. Bookkeepers in private practice will “hold on”, to a client, despite not being equipped to deal with the assignment.

Business clients should verify the credentials of their bookkeepers before engaging them for complex assignments. Accountants and bookkeepers can work hand in hand. For some accountants to get involved in bookkeeping is a tedious task, they need the assistance of bookkeepers.

Many tasks cannot be performed without an accountant. But accountants can also outsource work to bookkeepers. The two professions must augment each other. But persistent greed will kill the industry.

Sean Goss
Small Business Consultant
website: http://www.sgafc.co.za

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