Accountant vs Bookkeeper: Which Does Your Agency Need?

A bookkeeper records financial transactions. They process invoices, reconcile bank feeds, manage receipts, run payroll, and ensure your day-to-day financial records are accurate and up to date. Think of them as the person who keeps the books tidy.

An accountant takes those tidy books and turns them into strategic information. They prepare statutory accounts, file tax returns, advise on tax planning, produce management reports, and help you understand what the numbers mean for your business decisions. A chartered accountant (ACA, ACCA, or CIMA) has formal qualifications and is regulated by a professional body.

For agencies specifically, the distinction matters because your finances involve complexities that go beyond basic bookkeeping. Media passthrough, work-in-progress recognition, contractor IR35 compliance, and multi-currency invoicing all require accountant-level knowledge to handle correctly.

A bookkeeper will record a £50,000 client payment as income. An accountant will ask: is £30,000 of that media passthrough that should not be recognised as revenue? That single distinction can change your reported turnover by 60% and affect everything from VAT to Corporation Tax.

Very small agencies (1–3 people) can often get by with just an accountant who handles everything, or a bookkeeper plus basic annual accounts from a cheap accountant. The volume of transactions is manageable.

Once you reach 5–10 people, you almost certainly need both. The transaction volume (invoices, expenses, payroll) justifies a dedicated bookkeeper, while the complexity of tax, reporting, and compliance requires a qualified accountant. The most cost-effective setup is often a single firm that provides both services together.

Bookkeeping and accountancy are priced very differently. Bookkeepers typically charge by the hour or by transaction volume. Accountants charge fixed monthly fees or annual packages. Understanding the pricing landscape helps you budget and compare quotes.

The best approach for most agencies is to find a firm that provides both bookkeeping and accountancy as an integrated service. This eliminates the communication gaps that occur when your bookkeeper and accountant are different providers. Your accountant sees the raw data as it comes in, not a month later when preparing accounts.

If you do use separate providers, ensure they work on the same platform (ideally Xero) and have a clear handoff process. The most common problem we see is agencies whose bookkeeper enters data one way and whose accountant then has to reclassify everything at year end.