Financial forecasts, projections, and budgets,. Working with a designated accountant, meanwhile, is your best course of action when you need help analyzing and transforming those records into: They are integral to recording the day to day and monthly financial activities surrounding your organization’s: Maintain general ledger and chart of accountsīookkeepers are required to know some basic accounting. Generate monthly financial statements such as income statement, balance sheet, and cash flow statementĬomplete annual tax returns and conduct tax planning Perform financial analysis and financial planningĬonduct bank and credit card account reconciliations Process payroll and remit payroll deductions Review financial statements and account balancesĬreate customer invoices and collect payments Record and categorize financial transactions Key Differences Between Bookkeeping and Accounting Bookkeeping tasks Ultimately, filling both these roles in your business will keep your company running smoothly with the two levels of finances handled correctly.As their names would suggest, bookkeepers “keep” or manage your company’s financial books and records, while accountants “account” for – or analyze and explain – what’s in them.Īs a result, accountants and bookkeepers work in tandem to ensure your company’s finances are not only organized, up-to-date, and compliant but that they’re being used to elevate your business performance. You might want to consider hiring a virtual bookkeeping firm to handle these day-to-day tasks, and keep your Accounting in-house. While it is possible to use an Accountant for bookkeeping tasks, you will typically pay a higher rate for jobs that a Bookkeeper could perform at a lower rate. It is crucial to hire a Bookkeeper because, without the help of one, an Accountant will not have the accurate records necessary to complete some of their own tasks, such as financial forecasting. The tasks of an Accountant, such as managing tax documents, for instance, can be more specialized and will occur at the end of a fiscal year. While Bookkeepers are typically completing tasks that are essential for the business on a daily basis, accounting tasks are not day-to-day activities. Preparing tax documents for your Tax Accountant or CPA. Forming a budget and analyzing expenses. Structuring and forming financial statements. In contrast, the responsibilities of an Accountant can be more involved and may include: Reconciling bank and credit card statements. The best way to understand the difference between the two is to be aware of the tasks they fulfill.īookkeeping tasks are less involved and can be repetitive. 
It is for this reason that Accountants are required to have a degree.
They turn the data the Bookkeeper records into usable information for business planning. They explore your business finances, make projections and provide advice that can benefit you. In contrast, an Accountant’s role is to handle the finances at a higher level. Ultimately, a Bookkeeper’s role will be to maintain the financial records of the company by tracking money moving in and out of the business. Thus, a Bookkeeper has a specific set of tasks and day-to-day activities. Instead, you may require training, certain knowledge, and an understanding of the systems used by the company. Understanding the Differences Between Bookkeeper and AccountantĪs already mentioned, to be a Bookkeeper you don’t need a degree or certificate, though this may help. Let’s look at some of the other differences. Thus, Accountants can charge higher hourly rates. Bookkeepers may have a high school diploma, certificate, or even some college, but no degree is required. Why is this? To be an Accountant you need to at least have a Bachelors in Accounting. Hiring an Accountant will likely be more expensive compared to the cost of a Bookkeeper. It’s worth pointing out that the first difference a business owner should take note of is the contrast in cost. However, you’re about to discover that despite the similarities, there are clear and important distinctions between the two. Indeed, it’s common for people to assume the two are the same or that one is not necessary if you have already hired the other.
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