What’s the Difference Between a Bookkeeper and an Accountant?
Regardless of your industry or your company’s legal structure, bookkeeping and accounting professionals are vital to the health of your business. Most people would be hard-pressed to describe the difference between an accountant and a bookkeeper. And while the terms are often used interchangeably, there is a great difference between accountants and bookkeepers in terms of their roles when it comes to managing and leveraging your financial data.
Simply put, bookkeeping is more transactional and administrative, concerned with recording financial transactions. Accounting is more subjective, giving you insights into your business’s financial health based on bookkeeping information. You don’t need any specific training to be a bookkeeper or even a degree. Just general attention to detail can help you get the job. Accountants, on the other hand, go through strenuous training and standardized exams to become CPAs.
In this article, we’ll explain the functional differences between accounting and bookkeeping, as well as the differences between the roles of bookkeepers and accountants.
What does a bookkeeper do?
A bookkeeper doesn’t require formal training and typically reports to the accountant at an organization. But just like an accountant, the duties of a bookkeeper are vital to the financial success of a business.
Here are just some of the duties a bookkeeper is typically responsible for:
Bookkeepers are required to know some basic accounting. They are integral to recording the day to day and monthly financial activities surrounding your organization.
What Does An Accountant Do?
As an accountant, you may have to crunch numbers, but those are not the only skills needed. It is important to possess sharp logic skills and big-picture problem-solving abilities, as well. To qualify for the title of an accountant, generally an individual must have a bachelor’s degree in accounting. For those that don’t have a specific degree in accounting, finance degrees are often considered an adequate substitute.
Accountants, unlike bookkeepers, are also eligible to acquire additional professional certifications. For example, accountants with sufficient experience and education can obtain the title of Certified Public Accountant (CPA), one of the most common types of accounting designations. To become a CPA, an accountant must pass the Uniform Certified Public Accountant exam and possess experience as a professional accountant. These required credentials are a determining factor in the cost of an accountant.
Here are just some of the duties an accountant is typically responsible for:
The bottom line
Organized financial records and properly balanced finances produced by the bookkeeper, coupled with smart financial strategy and accurate tax filing by the accountant, contribute directly to the long-term success of every business.
Hiring a bookkeeper or an accountant may be worth it to ensure your business’s financial success, depending on your business size, growth, and your comfort working with numbers. Whether you need to record transactions or take a big-picture look at your financials, remember that successful business decisions rely on good record-keeping and financial accounting. It may be time to consider outsourcing your bookkeeping or accounting, even if you don’t hire someone full-time. Decision-making for your business can become much easier if you have a solid understanding of your business’s financial picture through both bookkeeping processes and accounting tactics. Chat with us to learn more about how we can help you streamline your business processes.