A lot of people do not understand the difference between people who keep a check on the money for a business. A bookkeeper and an accountant seem like the same thing to them, and if you throw a Tax Agent into the mix it just makes things worse.
The easiest way to explain what role each has is perhaps to look at them individually.
Bookkeepers literally keep the books. They keep records of finances, look after cash flow, prepare invoices, verify transactions and check everything is in order. Without demeaning the work they do, they are generally less highly qualified than an accountant.
An accountant’s job can appear to overlap that of a bookkeeper, and in fact it can involve some of the same jobs. However, an accountant takes everything further. Not only do they collect financial data, (which can be provided by a bookkeeper if a company has both, to save time), but they are responsible for analysing this too. From the information they will create budgets and ensure they are maintained. They also prepare financial statements and undertake audits, to name but a few of the extra chores they do.
They are responsible for ensuring the business complies with whatever financial regulatory requirements that branch of business must maintain.
In short, they need a knowledge that goes beyond balancing the books, and have to keep up with any laws regarding money movement that may be made.
A tax agent is an accountant who specialise in taxation and everything regarding taxes. They advise on tax laws and requirements, can represent a business in any dealings with tax authorities, and tell you what you can and cannot deduct from tax returns.
To Sum Up
This is a simplified account of each person’s role in a business, but it should help clear up any misconceptions.
Each person needs some sort of qualification if they wish to work on a professional level, the certificate for bookkeeping being the lowest and tax agent the highest.