Do accountants do bookkeeping?

If you’ve ever wondered whether accountants handle bookkeeping, you’re not alone. The terms “accounting” and “bookkeeping” are often used interchangeably, but they’re not exactly the same thing. While they are closely related, they serve slightly different purposes in the financial life of a business.

So, do accountants actually do bookkeeping? The short answer is — sometimes. Let’s explore when, why, and how.

What Is Bookkeeping?

Bookkeeping is the process of recording day-to-day financial transactions. This includes:

• Recording sales invoices

• Processing purchase invoices and bills

• Tracking receipts and payments

• Reconciling bank transactions

• Managing payroll entries

• Recording VAT if applicable

• Keeping records of expenses and assets

In simple terms, bookkeeping is the groundwork. It ensures that every penny moving in and out of the business is recorded correctly and consistently.

What Is Accounting?

Accounting steps in after bookkeeping. It involves interpreting, classifying, analysing, and summarising financial data. Accountants take the records maintained by bookkeepers and use them to:

• Produce financial statements (profit & loss, balance sheet)

• File tax returns (corporation tax, self-assessment, VAT, payroll taxes)

• Offer financial advice based on the business’s performance

• Assist with budgeting, forecasting, and financial decision-making

• Handle compliance with HMRC and Companies House

While bookkeeping focuses on the detail, accounting focuses on the bigger picture.

So… Do Accountants Do Bookkeeping?

Yes, Some Accountants Do Bookkeeping

Many accountants offer bookkeeping as part of their service, especially for small and medium-sized businesses. Some firms include bookkeeping within a wider package that covers payroll, VAT returns, annual accounts, and tax filings.

This is particularly common in modern firms that use cloud-based accounting software, where the line between bookkeeping and accounting is increasingly blurred.

But Not Always

Some accountants don’t handle day-to-day bookkeeping. Instead, they rely on either:

• The client doing their own bookkeeping

• The client hiring a separate bookkeeper or bookkeeping service

In these cases, the accountant’s work begins once the bookkeeping is up-to-date — preparing accounts, checking accuracy, and managing compliance tasks.

Why Don’t All Accountants Do Bookkeeping?

Bookkeeping is detail-oriented, transactional work. Some accountancy firms prefer to focus their time on higher-level financial tasks, strategic advice, and tax planning rather than transaction processing.

Additionally, from a cost perspective, bookkeeping is typically charged at a lower rate than full accounting services. Some firms outsource it, have specialist in-house bookkeeping staff, or leave it to clients.

How Bookkeeping Has Changed

In the past, bookkeeping was largely manual — involving spreadsheets, ledgers, and receipts in shoeboxes.

Today, cloud-based accounting software (like Xero, QuickBooks, Sage, and FreeAgent) has automated large parts of the bookkeeping process. Software can:

• Connect directly to bank feeds

• Automatically import transactions

• Suggest categories for income and expenses

• Generate invoices and track payments

• Produce real-time reports

As a result, many accountants now offer bookkeeping services because it integrates seamlessly with their systems. Clients and accountants can share live access to the same data.

Benefits of an Accountant Doing Your Bookkeeping

• Simplicity: One point of contact for all financial tasks.

• Accuracy: Fewer errors when the same team handles bookkeeping and year-end accounts.

• Compliance: VAT, payroll, and taxes are more likely to be filed correctly and on time.

• Efficiency: Integrated systems mean less duplication of work.

• Advice-ready: When accountants see your books in real-time, they can offer advice faster.

Downsides of an Accountant Handling Bookkeeping

• Cost: Accountants may charge more for bookkeeping compared to hiring an independent bookkeeper.

• Less Flexibility: If the accountant focuses on tax work, their availability for day-to-day queries might be limited.

• Specialisation: A dedicated bookkeeper may offer more hands-on, detailed support for day-to-day admin.

Who Typically Handles Bookkeeping?

• Small businesses: Often manage their own bookkeeping with software.

• Medium businesses: Use either an in-house bookkeeper, an outsourced bookkeeping service, or their accountant.

• Large businesses: Usually have a dedicated finance team with bookkeepers and an external accountant for oversight and compliance.

What Happens If Bookkeeping Is Poor?

When bookkeeping is neglected or inaccurate, it leads to:

• Incorrect VAT returns

• Payroll errors

• Wrong tax filings

• Late submissions to HMRC or Companies House

• Poor visibility over business performance

• Potential penalties and fines

This is why even small businesses are increasingly choosing to outsource bookkeeping — whether to their accountant or a specialist bookkeeper — to ensure accuracy.

Conclusion: Do Accountants Do Bookkeeping?

The answer depends on the accountant. Many modern accountancy firms do offer bookkeeping, particularly those who use cloud-based software and serve small business clients. Others prefer to focus on accounting, tax, and advisory services, leaving the day-to-day transaction work to bookkeepers or the business itself.

In practical terms, bookkeeping and accounting are two sides of the same coin. One records the data, the other interprets it. Whether you choose to combine them with one provider or split them between a bookkeeper and an accountant depends on your business size, budget, and needs.