If you’re a small business, help with the financial side can be a lifesaver. But what are the differences between a bookkeeper vs. accountant? Learn more here.
Have you ever wondered what’s the difference between an accountant and a bookkeeper?
You have probably heard these terms used interchangeably even though they are very different. As a matter of fact, one makes almost double the salary of the other.
If you are a small business owner looking for help with the financial side of the business, which will you hire – a bookkeeper or an accountant?
Bookkeeper vs. accountant? What are the differences? Learn more here.
Bookkeeper vs. Accountant
Both of these have job descriptions that include assistance with the finances of a business, but they each play a specific role.
What Is a Bookkeeper?
The literal definition of a bookkeeper is the person who keeps the books. It is the bookkeeper’s job to record all of a business’ transactions.
A bookkeeper uses a general ledger to keep track of debits and credits of a business on a daily basis.
A bookkeeper has the role of taking care of a business’ day-to-day financial upkeep.
Main Roles of a Bookkeeper:
- Record all financial transactions, including receipts, payments, and invoices
- File all documentation related to financial transactions
- Reconcile accounts
- Establish and maintain a system for the company’s payroll
- Maintain accounts receivable and accounts payable
A bookkeeper handles all of the general accounting duties for a business.
A bookkeeper needs to have a high school diploma at a minimum. Some employers look for some schooling that includes business or accounting courses, or even an associate degree.
What Is an Accountant?
In cases when a company employs both an accountant and a bookkeeper, the accountant uses the information recorded by the bookkeeper and compiles reports after analyzing the ledgers.
The accountant uses this information to make recommendations and create financial models for a business. An accountant’s job is to be an advisor and make projections based on the past financial performance of the business.
Main Roles of an Accountant:
- Inform the company of their cash flow and profitability
- Make suggestions on how to handle financial decisions
- Tax advice and planning
- Prepare income tax returns
- Keeps the company in compliance with rules and regulations
- A Certified Public Accountant (CPA) acts as a representative of the company before the IRS
The role of an accountant is vital to the success and stability of a business.
An accountant will have a bachelor degree in accounting or finance with coursework in cost accounting, managerial accounting, financial accounting, and auditing to name a few.
A master’s degree is preferred. To become a Certified Public Accountant, you are required to pass all 4 of the parts of the CPA exam after earning a master’s degree and having some experience working as an accountant.
Does It Have to Be One or the Other?
If you are ready to hand over your small business finances to a professional, do you have to choose between a bookkeeper and an accountant? Is it bookkeeper vs. accountant? It doesn’t have to be.
A bookkeeper and an account can work together to meet the financial requirements of and further the success of your business.
Contact us with questions on our financial services and business software that will benefit your small business.