Accountancy and Bookkeeping for your private medical practice
For somebody who doesn’t work in finance, it can be difficult to understand the difference between accounting and bookkeeping, as there are some administrative areas that overlap.
The important difference for most doctors however will be that a bookkeeper charges far less per hour than an accountant! This vital piece of information should ignite a passion to ensure the bookkeeping is done well, therefore reducing the amount of time needed by an accountant. Key to this of course is understanding the difference in the roles.
Bookkeepers and accountants share common goals, but they support your business in different stages of the financial cycle.
Bookkeeping is more administrative with the main focus being on recording financial transactions. Accounting is more subjective, giving you insights into your business’s health based on the financial information provided by bookkeepers.
What is a bookkeeper
Accurate bookkeeping is a legal requirement for all businesses, and it refers to the recording of the financial transactions of a business, whether a sole trader, a partnership, or a limited company.
A bookkeeper will record all daily transactions either manually or within a specialist finance system like XERO, utilising their bookkeeping skills, and also keep copies of all invoices, receipts and evidence of these incomings and outgoings, facilitating audits.
The role of a bookkeeper will include:
- Recording financial transactions
- Posting debits and credits
- Producing invoices
- Preparation of financial statements (balance sheet, cash flow statement, and income statement)
- Maintaining and balancing subsidiaries, general ledgers, and historical accounts
- Completing payroll
What is an Accountant
An accountant has expert knowledge and qualifications surrounding taxes and accountancy. The right accountant will guide you and act as your financial business partner, ensuring all allowable expenses are claimed and all decisions are tax efficient for the business and also the owners, directors, and partners.
The role of an Accountant will include:
- Preparing and adjusting entries (recording expenses that have occurred but aren’t yet recorded in the bookkeeping process)
- Reviewing company financial statements
- Analysing costs of operations
- Completing income tax returns
- Aiding the business owner in understanding the impact of financial decisions
Your practice needs
To run your practice finances well, bookkeeping should be undertaken on an ongoing basis to ensure that all transactions are recorded accurately. Ideally, your qualified bookkeeper will provide you with a monthly report so you can easily check that all expenses have been included and also keep a close eye on any bad debt issues.
Your accountant will value the accurate information provided by your bookkeeper as producing your end-of-year accounts will be a straight forward activity. You will appreciate this as your accountancy bill will be lower.
But your account can and should provide you with valuable advice throughout the year. You may choose to have a monthly or quarterly management accounting pack of information that enables you to understand the profitability of your practice and also predict your future tax obligations based on accurate financial data.
Designated Accountancy Services
All business owners want to have complete control of their business finances and have access to an up-to-date view of their financial performance.
Our team of Designated accountants are experts in accountancy but also have a deep understanding of the private medical sector.
Designated as a Xero Partner and our finance team members are Xero certified advisors, trained by Xero, to deliver you the best financial support.
Do you wish you had answers to questions like these?
- How much tax will I need to pay next year?
- How much profit did we make last month?
- What do you mean by Tax Digital?
- Am I managing payroll in the most effective way?
If so, then our Accountancy and Bookkeeping services may be your solution.