As a professional bookkeeper, it’s always common to get mixed up with accountants. People ask me all the time, what is the difference between a bookkeeper and an accountant? For starters, no, they are not the same thing. What they do can overlap a bit, but they are very different professions. Here is the difference between a bookkeeper and an accountant.
What Do Bookkeepers Do?
Bookkeepers record daily transactions that happen in your business. They post debits and credits, produce invoices, complete payroll, and maintain and balance your accounts for you. Keeping a ledger for your business is one of the main aspects of bookkeeping as well. Depending on the business’s size and the number of transactions, your bookkeeper is responsible for recording these in a ledger and gathering supporting documents.
What Do Accountants Do?
Accountants are high-level financial processors. They use the information from both the business owner and the bookkeeper to produce financial data. They prepare and adjust entries, prepare financial statements, complete tax returns, and help the business owner understand their finances. The main job of an accountant is to bring awareness of cash flow and tax planning and to file with the business owner.
Credentials Needed for Each Profession
Bookkeepers don’t need to have formal education. However, bookkeepers can sometimes be overseen by accountants, but a bookkeeper is not an accountant. Accountants are required to have specific finance degrees to gain their accountant title. Unlike bookkeepers, they can get professional certifications such as CPA for their job title.
Can Bookkeepers Call Themselves Accountants?
Bookkeepers are not the same thing as accountants. Not by a long shot.
Bookkeepers job is recording business transactions, invoicing, payroll, and balancing your accounts for you. Their main job is to record and provide that information to an account to handle things like taxes or business summaries for you.
Do Accountants Do Bookkeeping?
Accountants sometimes offer bookkeeping services to their clients. However, due to their certifications and other professional requirements, they are typically more expensive than bookkeepers. You’ll also be hard-pressed to find an accountant who would just handle your bookkeeping for you.
Final Thoughts on Accounting VS. Bookkeeping
When it comes to organizing your financial records and balancing the finances, these are done by your bookkeeper. When it comes to financial strategy and tax filing, these are going to be done by your accountant. However, both are needed for financial success for your business. While many will choose to handle their business finances, there is a benefit to hiring out these services to someone else. You not only gain back the time to do the aspects of your business that you do like, but you don’t have to stress about your business’s financial side. The two professions work together, even when they overlap at times.
As you can see, there are quite a few significant differences between an accountant and a bookkeeper. Hopefully, this comparison has helped you determine which one you need to use in order to choose the right one for your business.