What’s the difference between Accountant, Bookkeeper & Tax Agent?

August 10, 2017 October 22nd, 2021

An accountant, a tax agent and a bookkeeper walk into a bar…

The stereotyped image of all three is that they are boring, with no sense of humour, no personality, and very nerdy…

Okay, I was a little nerdy at school. But I am six foot six, weigh too much and have played rugby for NSW Country. I live on a farm outside Molong where I am building my own home for the second time.  I have never worn a tie to work but wear boots and have been known to stomp mud through the office.

Not the typical accountant!

Is there any difference between accountant, bookkeeper & tax agent?

Just as the above stereotype is wrong, so is the perception that an accountant, bookkeeper, and tax agent all do roughly the same job.

In fact, there are important differences between accountant, bookkeeper, and tax agent – and you need to hire the right one to keep your small business on track.

Let’s break this down a little so it’s crystal clear…

An accountant

There are important differences even between accountants. The perception that an accountant is an accountant is an accountant is wrong.

We don’t all do the same thing. Most people presume that our days are filled with tax and compliance, but that’s far from the truth.

Accountants are like doctors – for starters, they’re everywhere! But, just as there are many different types of doctors (general practitioner, paediatrician, psychiatrist, oncologist, etc.) the accounting profession includes many different types of accountants.

For instance, there are in-house company accountants, management accountants, tax accountants, financial accountants, cost accountants, and the list goes on.

Each different type of accountant works in completely different environments, with very different skill sets, solving different problems and there is often very little in common. A management accountant may well know very little about tax – just as a cardiologist wouldn’t be able to perform plastic surgery.

A bookkeeper

There is often an overlap between bookkeeping and accounting and, in reality, bookkeeping is the foundation of accounting.

Bookkeeping is the allocation or processing of transactions. Although bookkeepers are generally not degree-qualified, there are a few bookkeepers out there who are qualified accountants but perhaps don’t have the experience or desire to take it to the next level.

If we go back to my previous analogy of accountants and doctors, we can go a step further and say that bookkeepers are like nurses. They do the day-to-day work, such as raising invoices, paying bills, and processing payroll.

However, it will be the accountant who ensures the allocations are correct, prepares and interprets reports, and ensures that all the compliance requirements are being met.

A tax agent

A tax agent is a specialist accountant who has studied tax and law to be registered by the Tax Practitioners Board.

Being registered means that they are licensed to provide tax services to the public. However, it is not a lifetime licence – it must be renewed every three years.

Although accountants and tax agents are not the same thing, they can be the same person (just like me). Accountants generally have more than one qualification or speciality – like financial planning for example.

So those are the main differences between accountant, bookkeeper, and tax agent. Clear as mud, right?

The distinction is not such a concern for MBC clients as we have all three – accountants, tax agents, and bookkeepers – under the same roof.

The benefits of doing this are huge.

Our accountants have the knowledge of the detail available at any time through the bookkeeping team, and the bookkeepers have access to accounting and taxation expertise, as needed.

It is a win-win for our team, and a win-win for our clients: through one business relationship, they have access to all the major skillsets and the peace of mind that all their bookwork, accounts, and tax returns are being completed accurately and on time, every time.