Despite the fact that the terms are frequently used interchangeably, bookkeeping and accounting are not the same thing. A bookkeeper, in general, manages and organises records of a company’s financial activities, while an accountant analyses and analyses that financial data. Both of these positions are vital for your organisation.
While some organisations may have both a bookkeeper and an accountant on staff, others may just have one person who is responsible for both duties. It is crucial to remember, however, that although an accountant may be a bookkeeper, not all bookkeepers can be accountants.
What Is the Role of a Bookkeeper?
A bookkeeper keeps track of a company’s day-to-day financial transactions. They keep track of a company’s purchases, salaries, and sales. Some of the specific tasks that bookkeepers frequently perform are as follows:
Manage accounts receivable and accounts payable
Invoices must be created and sent.
Keep a general ledger.
Input financial transactions into accounting software.
Make financial statements.
Bookkeepers are often in charge of compiling a variety of financial statements. The three most common are:
Profit and loss statements
The balance sheet
Cash flow statement
More information about some of the responsibilities of bookkeepers can be found in our Guide to Small Business Bookkeeping.
What Is the Role of an Accountant?
The interpretation and analysis of financial transactions and records is known as accounting. While a bookkeeper mostly records data into different reports and tables, an accountant’s primary responsibility is to give somewhat subjective financial recommendations to the organisation.
Some of the most typical jobs that an accountant is responsible for are as follows:
Tax Return Preparation
Giving financial advice
Making financial adjustments
Financial projections for the future
Handling corporate reporting duties
The actual day-to-day activities of an accountant will be heavily influenced by their individual credentials as well as the demands of the organisation.
What Is the Difference Between a Bookkeeper and an Accountant?
As previously said, one of the biggest distinctions between a bookkeeper and an accountant is their principal work duties. While there may be some overlap in tasks, particularly in smaller businesses that do not employ two different jobs, a bookkeeper records a business’s day-to-day financial activities, while an accountant evaluates and analyses these financial data.
Due to these various obligations, bookkeepers and accountants generally have different educational backgrounds and certifications.
Qualifications for Bookkeepers
Bookkeepers normally aren’t needed to have any specialised schooling or professional training and certification. While the requirements required differ per organisation, it is feasible to become a bookkeeper without even a bachelor’s degree.
Many businesses, however, demand their bookkeepers to have certain levels of schooling and even particular certificates. Bookkeeping certificates are available from two major organizations:
The American Institute of Professional Bookkeepers is a professional organisation of bookkeepers in the United States (AIPB)
National Association of Certified Public Bookkeepers (NACPB) (NACPB)
Each of these organisations has its own certification procedure, and both need continuing study to keep the certification.
Qualifications for Accountants
Accountants, unlike bookkeepers, must have a bachelor’s degree in Accounting or a related financial field from an accredited college or university.
Furthermore, there are more stringent qualifications to become a certified public accountant (CPA). Each state has its own criteria, but the common minimum is 150 semester hours of college or university education, a year of professional accounting experience, and a passing score on the CPA test. CPAs must keep current and take further education to retain their certification after getting certified.
It is crucial to remember that several states prohibit anyone from using the title “professional accountant” unless they are a CPA.
How to Hire an Accountant or Bookkeeper
The first step in hiring a bookkeeper or accountant is determining whether you even need one. If your company is new, you may be able to manage most financial-related activities alone by utilising bookkeeping or accounting software. To assist you in making your decision, we’ve put together this guide to the Best Accounting Software for Small Businesses.
If you don’t want to take on all of these tasks, you must first pick which of the two positions you need to fill (or both), and then decide whether you want to recruit someone on a part-time or full-time basis.