Is an Accountant the Same Thing as a Tax Agent? And Where Does the Bookkeeper Fit in?
Whenever I go to a BBQ, and people ask me what I do, the minute I say “I’m an accountant”, they immediately either get that look of horror on their face that says “get me out of here quick” or they immediately start asking me questions about their tax. Either response isn’t what I want when I’m at a BBQ, but it is indicative of the both the stereotype and misconception around accountants.
The myth (and I say myth because if you’ve ever met me, you’ll know exactly what I mean) is that all accountants are boring, no sense of humour, no personality and very nerdy….OK I’m very nerdy I’ll give you that but I can promise you the rest of stereotype is way off the mark.
The other misconception is that an accountant is an accountant, and they all do the same thing….presumably tax but oh how wrong you are.
You see accountants are like doctors – they’re everywhere but just as there are many different types of doctors – such as general practitioner, paediatrician, psychiatrist, oncologist, ophthalmologist, etc – in the accounting profession there are also different types of accountants too – such as in-house company accountants, management accountants, tax accountants, financial accountants, cost accountants, forensic accountants, and the list goes on.
The title Accountant is a broad term for anyone who has a qualification in Accounting and just to confuse you sometimes companies give titles to employees such as ‘accountant’ even if they aren’t qualified but are working in the accounts department.
Each different type of accountant works in completely different environments, with very different skill sets, solving different problems and other than they all use debits and credits there is quite often very little in common between them – just like an oncologist wouldn’t know much about ophthalmology a management accountant has minimal knowledge about tax.
So then what exactly is 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 they are licensed to provide tax services to the public, however, this licence is not a lifetime licence – it must be renewed every three years.
To stay licensed, they must have appropriate insurances, have no criminal convictions, have their own tax affairs up to date and must maintain their tax and law knowledge by ongoing professional education – which is why we always seem to be at conferences and seminars – because we are!
Now although accountants and tax agents are not the same thing, they can be the same person – take me for example – and just like doctors, accountants can obviously have more than one qualification or speciality – think paediatric oncology for example.
So then how does a bookkeeper fit into the equation? This is a great question because there is often an overlap between bookkeeping and accounting and the reality is that bookkeeping is the foundational piece of accounting.
Bookkeeping is the allocation or processing of transactions such as income or expenses. 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. This ties in with my earlier point that there are lots of different types of accountants so please don’t assume because your bookkeeper is a qualified accountant that they are a great bookkeeper.
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, and they do the day to day work such as raising invoices, paying bills and processing payroll but it is the accountant who ensures the allocations are correct, prepares and interprets reports and ensures all the compliance requirements are being met.
And there you go… I hope this helps!
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