Managing finances is one of the biggest challenges for small business owners and sole proprietors. As your business grows, you may wonder: Do I need a bookkeeper, an accountant, or both? While both roles are important, they serve very different purposes. Understanding these differences can help you make the right decision for your business.

The Role of a Bookkeeper

For SMEs or sole proprietors, a bookkeeper handles the day-to-day recording of financial transactions. This includes tracking income and expenses, reconciling bank statements, and maintaining ledgers. A bookkeeper ensures your records are accurate, organised, and ready whenever you need them.

Read more about whether you should hire a bookkeeper here.

Even if your business is small, a bookkeeper provides clarity and structure, helping you manage cash flow, track expenses, and avoid errors. Many sole proprietors start by handling bookkeeping themselves, but having a professional ensures accuracy and frees up time to focus on customers and growth.

The Role of an Accountant

Accountants take a professional, high-level view of your finances. While bookkeepers maintain records, accountants interpret and analyse them, providing advice that helps your business stay compliant, efficient, and profitable.

Key responsibilities include:

• Preparing financial statements and reports
  
  
• Advising on tax planning and compliance
  
  
• Conducting audits or reviews
  
  
• Analysing cash flow and profitability
  
  
• Supporting budgeting, forecasting, and strategic decisions
  
  

1. Ensuring Tax Compliance and Maximizing Deductions

Tax regulations are complex and constantly evolving. Missing deadlines, filing incorrectly, or failing to claim eligible deductions can result in penalties, audits, or overpaying taxes.

What accountants do:

• Ensure timely and accurate tax filings
• Identify legitimate tax deductions and incentives you might overlook
• Stay updated on regulatory changes affecting your business
• Minimize tax liability through strategic planning

The money saved through proper tax optimization often exceeds the cost of hiring an accountant. Additionally, avoiding penalties and interest charges protects your bottom line.

2. Saving Time to Focus on Core Business Activities

The time you spend managing accounts, reconciling statements, and preparing financial reports is time taken away from serving customers or growing your business.

What you gain:

• Freedom to focus on revenue-generating activities
• Reduced administrative burden on you and your team
• More time for strategic planning and business development
• Better work-life balance as a business owner

For many SME owners, the opportunity cost of doing their own accounting far exceeds the cost of professional services.

3. Improving Cash Flow Management

Poor cash flow management is one of the leading causes of small business failure. Even profitable businesses can fail if they run out of cash.

How accountants help:

• Monitor cash flow patterns and forecast future needs
• Identify cash flow issues before they become critical
• Advise on payment terms, credit policies, and working capital management
• Create strategies for managing seasonal fluctuations

Professional cash flow management helps ensure your business has the liquidity needed to operate smoothly and seize growth opportunities.

Accountants are qualified professionals, often holding certifications such as CPA (Certified Public Accountant) or CA (Chartered Accountant). For SMEs and sole proprietors, they can be especially valuable because they can provide expert guidance on tax obligations, deductions, and compliance issues that small business owners may overlook.

Long-Term Value and Return on Investment

While hiring an accountant involves an upfront cost, the long-term benefits often far exceed the expense. Accountants can help SMEs avoid costly mistakes, reduce tax liabilities, and improve cash flow management. Their proactive approach to financial planning and risk management can lead to significant savings and increased profitability. Moreover, by handling complex financial tasks, accountants free up business owners to focus on core operations and strategic initiatives, ultimately contributing to the overall success and sustainability of the business.

When Should You Hire an Accountant?

While every business has different needs and workflows, you may consider hiring an accountant when:

• Your annual revenue is >SGD 100,000-200,000
• You’re spending > 5-10 hours per week on accounting tasks
• You have employees and need to manage payroll
• You’re GST-registered or approaching the registration threshold (at, or projected to exceed SGD 1million annually) 
• You’re seeking external funding or investors

Many SMEs start with quarterly or annual accounting services and increase involvement as the business grows. 

Do You Need Both?

Many SMEs and sole proprietors benefit from having both a bookkeeper and an accountant. The bookkeeper maintains accurate daily records, while the accountant interprets the data and offers professional guidance. For smaller businesses, it may make sense to start with one role and add the other as the business grows.

Bottom Line

For SMEs and sole proprietors, clear, accurate financial management is crucial. A bookkeeper keeps daily records organised, while an accountant provides professional advice, compliance support, and strategic insights. Together, they help you save time, reduce errors, and make confident, informed decisions about your business’s future.

Need assistance with your accounts? Our team at Verti is always available to help. Reach out to us at contactus@verti.sg or +65 6909 5691.