Overview
This article explains the difference between a bookkeeper and an accountant, when a small business needs each, how the two roles work together, and why having both or a single firm that provides both, like 360 Accounts & Bookkeeping Ltd is often the best answer for sole traders, limited company directors, and small employers.
What Does A Bookkeeper Do?
• Records day-to-day financial transactions: sales, purchases, expenses.
• Reconciles bank statements and keeps accounting software up to date.
• Chases receipts and invoices, and maintains organised financial records.
What Does An Accountant Do?
• Prepares year-end statutory accounts and files Corporation Tax returns.
• Submits accounts and confirmation statements to Companies House.
• Advises on tax-efficient structures, dividends, director's salary, and strategy.
When Do You Specifically Need Each?
• Sole traders with simple income may manage with a bookkeeper (or software) plus year-endelf Assessment support.
• Limited companies, VAT-registered businesses, and employers almost always need an accountant for statutory compliance.
• Growing businesses benefit from setting up both bookkeeping and accountancy support from day one.
How They Both Work Together
• Accurate, up-to-date bookkeeping reduces the time and cost of year-end accountancy work.
• A single firm providing both eliminates handover gaps, delays, and duplicated work.
• Combined bookkeeping and accountancy support enables proactive, year-round tax planning rather than reactive, deadline-driven work.
Key Figures & Facts
• HMRC penalty for late Self Assessment filing starts at £100 (as of 25 August 2026).
• Companies House can charge up to £1,500 for annual accounts filed more than six months late (as of 25 August 2026).
• Limited companies are legally required to file statutory accounts and a Corporation Tax return annually.
Frequently Asked Questions And Answers
Can I just use accounting software instead of hiring anyone?
Software like Xero or QuickBooks is a great tool, but it won't catch misclassified expenses, ensure you claim everything you're entitled to, or file statutory returns for you. Most businesses use software alongside professional support, not instead of it.
I'm a sole trader with low turnover, do I really need an accountant?
Not always immediately, but an annual review of your Self Assessment return by an accountant helps identify allowable expenses and confirms whether incorporating would save you tax.
What's the difference in cost between a bookkeeper and an accountant?
Bookkeeping is typically charged at a lower rate, since it's more administrative. Accountancy fees reflect qualifications, compliance responsibility, and strategic advice. Bundling both with one firm is usually more cost-effective than paying two separate providers.
Do limited companies legally require an accountant?
There's no strict legal requirement, but limited companies must file statutory accounts and a Corporation Tax return correctly, with penalties for errors. In practice, almost all limited companies use an accountant to ensure compliance and optimise tax.
How often should I be updating my bookkeeping?
A: Ideally weekly or monthly, not just at year-end. Regular bookkeeping gives you a real-time cash and VAT position and makes year-end accounts faster and cheaper to prepare.
Can 360 Accounts provide both bookkeeping and accountancy?
Yes, 360 Accounts provides both under one roof, whether a business needs ongoing bookkeeping, year-end limited company accounts, or full support from start-up formation onwards. One team, one point of contact, no gaps.