The Difference Between a Bookkeeper Vs Accountant

In this article we take a look at what a bookkeeper or an accountant can do to help a business. If you prefer to make inferences and provide solutions, then you should consider a role as an accountant. Regardless of which you choose to become, you will undoubtedly make a difference in the businesses you work with and serve a crucial and in-demand role. If your goal is to move upwards within a company and have more power, then accounting will offer a better position to do so.

• A bookkeeper with professional certification shows they are committed to the trade, possess the skills and expertise required and are willing to continue learning new methods and techniques.
• This can help save money and keep a small business lean, although it requires a major time commitment and meticulous attention to detail from the business owner.
• Bookkeeping is a direct record of all purchases and sales your business conducts, while accounting is a subjective look at what that data means for your business and cash flow strategies.
• Accountants’ qualifications depend on their experience, licenses and certifications.
• The bookkeeper then pays the vendor bill through Bill.com, which syncs the bill and bill payment to their accounting software.

Bookkeepers, on the other hand, make about $18 per hour, so you might expect to be charged around $40 for their time. An accountant’s time is – largely – wasted on inputting, checking, and balancing. If you’re interested in getting more accounting vs bookkeeping out of the investments you make, making smarter buying decisions, or want to get a better handle on your cash flow, an accountant is going to be your best bet. Maintaining a general ledger is one of the main components of bookkeeping.

The Function of Bookkeeping

Bookkeepers may start working for a small business to gain experience and then go back to school for a degree in accounting or finance. Enrolling in one of the best online bookkeeping classes is a smart way for those interested in this career to bolster their existing financial knowledge. Whilst bookkeepers are responsible for compiling accurate records, accountants use this data to report on what’s happening in a business, and help it become more efficient.

Bookkeepers work with the accountant/tax preparer to make sure they have all of the documentation they need from the client’s business to prepare the annual returns. The salary for accountants can vary widely depending on location and experience. CPAs with only a year or so of experience generally make between $55,000 and $85,000 per year, with more experienced accountants making more than this.

Financial Auditor

As both professions engage in managing finances, a lot of people may confuse a bookkeeper for an accountant, and vice-versa. While they work towards a common goal, bookkeepers and accountants support the business in different ways, and in different stages of the financial process. Accountants are often responsible for not just keeping financial records in order, but for also interpreting financial documents, analyzing trends in spending and profit, and more. While it may seem very similar to bookkeeping, accountants will also report on projected trends or things they think will happen financially based on historical company data.

Essentially, it accounts for brand value, market share, customer base, and all other intangible assets that may make a company attractive to a potential purchaser. Erika Rasure is globally-recognized as a leading consumer economics subject matter expert, researcher, and educator. She is a financial therapist and transformational coach, with a special interest in helping women learn how to invest. Kelly Main is a Marketing Editor and Writer specializing in digital marketing, online advertising and web design and development. Before joining the team, she was a Content Producer at Fit Small Business where she served as an editor and strategist covering small business marketing content.

Expenses/Accounts Payable

Both bookkeeper and accountant are important parts of managing the business finances. Both can seem similar, but there are some important differences in their role of job. Bookkeeper mainly focus on recording day-to-day financial transactions, like sales, purchases, receipts, and payments. They maintain accurate and up-to-date financial records using tools like accounting and bookkeeping software, ledgers, and etc.

Both your bookkeeper and accountant can be trusted, key advisors for your business—just in slightly different capacities. An experienced bookkeeper can offer advice on ways to create effective financial systems so nothing falls through the cracks on a daily basis. Your bookkeeper will maintain your working ledger in a way that is accurate and easy to understand, and can alert you to red flags as they arise. Additionally, since they have a micro view into your books, they should be able to offer ideas on budgeting and spending in the short term.