Are you unsure who to hire as an accountant or bookkeeper for your business in order for it to thrive in the future or for the long term?
Don’t be alarmed! The differences between an accountant and a bookkeeper will be discussed.
You should understand the roles and other characteristics of a bookkeeper and accountant before hiring them. It will assist you in finding the ideal specialist for your company’s growth and effective decision-making.
What is bookkeeping, exactly?
Bookkeeping is the process of recording all of your business’s income and expenses. Accounting, on the other hand, is concerned with the in-depth examination of business operations. It gathers useful data from the analysis to assist a business owner in making key decisions about the company.
What is accounting, exactly?
An accountant can do the functions of a bookkeeper, but a bookkeeper cannot perform the functions of an accountant. This is due to the fact that an accountant has greater expertise and talent than a bookkeeper.
Let’s say you require assistance with your business. In that scenario, you should assess your organization’s financial situation and consider how you may grow it on your own or with the assistance of an accountant and bookkeeper.
This blog will help you decide if you need an accountant or a bookkeeper.
Accounting vs. Bookkeeping
Accounting and bookkeeping are two distinct professions, or, to put it another way, accounting begins when bookkeeping finishes. Because it is a part of the accounting process, bookkeepers and accountants do similar tasks. A bookkeeper is someone who prepares an organization’s financial records. The accountant supervises the job to ensure that the records are correct and that the bookkeeper is following their directions.
It becomes tough to keep track of all the financial computations by yourself when your firm grows and adds new clients, vendors, and workers.
When you have more bookkeeping and accounting responsibilities to complete, you might consider hiring an accountant or bookkeeper.
The work functions and various characteristics of accountant vs. bookkeeper are discussed here.
The accountant receives financial data from a bookkeeper. The accountant must examine it in order to extract the most important business insights and provide future advice to the business owner. The following are some accounting tasks:
- The data is demonstrated and investigated by an accountant.
- They prepare income transactions, balance statements, and tax return reports.
- Make recommendations to the business owner based on market trends and other chances for growth.
- Assist businesspeople in understanding the implications of economic decisions.
- Make changes to the entries.
Accounting exercises provide statements that show you your financial situation, where you’re succeeding, where you need to make changes, and what you want to achieve in the future.
A bookkeeper is in charge of keeping accurate accounts of an organization’s income and expenses. They prepare routine commercial transactions in a consistent and simple manner. Bookkeepers’ records aid accountants in doing their duties.
Here are some of the responsibilities of bookkeepers.
- Keep financial records
- Enter the debits and credits.
- Prepare invoices
- Completion of payroll
- Maintain ledger balances, subsidiaries, and historical accounts
Each sale and purchase should be recorded in the ledger, and a bookkeeper’s major responsibility is to keep track of the ledger.
A ledger might be complicated or simple, and we need software like Quickbooks and Xero to keep track of the chores and operations.
Qualification in Education
An accountant should have a bachelor’s degree in accounting or a finance associate’s degree. Accountants can pursue further certifications such as CPA (Certified Public Accountant). A bookkeeper can be an accountant.
Depending on their experience, accountants should have different licenses and credentials. You must pass the state’s unified CPA exam to become an advanced skilled accountant. If you pass the exam, it signifies you know how to use accounting software and communicate effectively.
No formal education is required to work as a bookkeeper. However, he or she must be knowledgeable with economic words and issues, as well as be able to perform precise calculations. The accountant and the business owner usually supervise the bookkeeper’s work.
A bookkeeper, on the other hand, cannot be considered an accountant. Because bookkeeping is not as difficult as accounting, a bookkeeper does not require a license or credentials.
According to the US Bureau of Labor Statistics, the average annual pay of an accountant was $71,550 in 2019. Your experience, location/city, and job performance, on the other hand, are the factors that influence your earnings. As a fresher, you can earn $20 per hour, but it can rise to $100 or more per hour.
A bookkeeper’s remuneration, like that of an accountant, varies depending on the services provided, expertise, and market. It also depends on the organization’s financial situation.
According to the Bureau of Labor Statistics, the average annual income for a bookkeeper in 2019 was $41,230.
Accountant vs. Bookkeeper Similarities
Despite their differences, accounting and bookkeeping sound comparable in several ways. Accounting foundations are required in both professions, and accountants and bookkeepers aid business owners in growing their businesses. Because of these similarities, some small and medium-sized firms prefer to engage bookkeepers rather than accountants to manage their accounts.
Bookkeepers are responsible for preparing financial reports and statements, among other things.
Bookkeepers and accountants have similar goals in that they do diverse activities to help an organization or business succeed.
Accountant vs. Bookkeeper Comparison Table
Accountant Bookkeeper Parameters for Comparison
To the business owner, explain, summarize, and convey the economic transactions.
Recognize, separate, and record a company’s monetary transactions.
Profit and loss, balance sheets, and cash flow records are all used by accountants.
A bookkeeper works with ledgers and journals.
A bachelor’s degree in accounting and other analytical skills are required of an accountant.
A bookkeeper does not need any special skills, but basic accounting knowledge is essential.
Level of Complicatedness
Accounting has a high level of complexity, and accountants must do complex calculations for greater precision.
They only need to record revenue and expenses in basic terms, thus the level of complexity is low.
Business owners can make key decisions based on the work or records of accountants.
Management is unable to make decisions based on the information provided by bookkeepers.
Finance, cost, management, HR, Accounting Responsibilities
Virtual Single EntryDouble Entry
When should you hire a bookkeeper or accountant?
The similarities and distinctions between accountant and bookkeeper are demonstrated in the preceding material. You now know who is most suited to manage your company’s operations. In addition, we will show you when you should hire one of them in order to reduce your losses.
Taxes are complicated.
When your taxes are complicated and you can’t handle them on your own, you should employ an accountant. Accountants are tax experts that can help you save time in this process.
When the tasks take a long time
If your accounting activities are time-consuming and you are wasting time managing them instead of focusing on the business’s growth. It is important to seek the advice of professionals and to follow their advice for greater prospects.
When your company is expanding on a daily basis
Everyone believes that their company should expand in leaps and bounds. It is acceptable to manage all aspects of a small firm on your own. If your company is continually increasing, you’ll need a bookkeeper to balance the books regularly and an accountant to investigate the company’s actions.
Both a bookkeeper and an accountant are essential for business growth. They try their hardest to gain access to the services of any company in the market. Our professionals can assist you with management accounting assignments.
Both bookkeepers and accountants play an important role in ensuring the long-term survival of your business through the use of structured financial records.
We’ve discussed the differences between accountant and bookkeeper roles, as well as other characteristics, in this blog. You may now choose which one to use to structure your business procedures. I hope that this post has helped you figure out where you need to go and what you need for your business to develop.
Questions Frequently Asked
Which career, accountant or bookkeeper, is the best?
Both professions are excellent at what they do and play different roles in a company. However, bookkeeping jobs are straightforward and do not necessitate any special talents, but accounting demands a skill set and a degree in the industry.
Accounting occupations are more difficult than bookkeeping positions, but the pay is the opposite. A bookkeeper makes less money than an accountant. You can pursue any vocation by evaluating its level of intricacy, wage range, and prospects for advancement.
What accounting and bookkeeping software is used?
Accounting softwares– We utilize a variety of accounting softwares to complete various tasks, including Quickbooks, Xero, Wave, FreshBooks, and others.
Bookkeeping Softwares- Because bookkeeping is a part of accounting, we employ the same softwares. We use accounting software such as Zoho Books, Odoo Accounting, Sage Intacct, and others.
What is the difference between an accountant and a bookkeeper who uses software?
Accountants and bookkeepers carry out distinct tasks with the same goal in mind. They employ a variety of tools to efficiently manage the company’s accounts, as well as to improve efficiency and security.