Are you confused about whom to hire an accountant or bookkeeper for your business organization to grow well in the future or the long life of your business?
Don’t panic! We will provide you with the various characteristics of an accountant vs. bookkeeper.
Before hiring a bookkeeper or accountant, you need to know their respective roles and other features. It will help you to hire a perfect professional for the business progress and effective decision making.
What is Bookkeeping?
Bookkeeping deals with the recording of all income and expenses of your business operations. On the other hand, accounting focuses on the detailed study of business operations. It conducts valuable information from the analysis that helps a business owner to make critical decisions regarding the organization.
What is Accounting?
An accountant can do the job/work of a bookkeeper, while a bookkeeper can not do the work of an accountant. The reason behind this is an accountant is more experienced and skillful than a bookkeeper.
Suppose you need any assistance in respect of your business. In that case, you should analyze the economic status of your organization and think about how you can grow your organization on your own or with the help of an accountant and bookkeeper.
This blog is for you to assist in deciding whether you require an accountant or bookkeeper.
Bookkeeping vs Accounting
Bookkeeping and accounting are two different professions, or i should say accounting begins, where bookkeeping ends. It is a part of accounting procedure, so the work of bookkeepers and accountants share some similarities. A bookkeeper prepares the financial records of an organization. The accountant leads the work to check if the record is correct; they also ensure that the bookkeeper is working per their instructions.
When your business involves more new customers, vendors, and employees for the progress, it becomes difficult to record all the finance calculations by yourself.
When you have more bookkeeping and accounting tasks to perform, it is suggested to hire an accountant or bookkeeper regarding the needs.
Here we are describing the job roles and other aspects of accountant vs. bookkeeper.
A bookkeeper provides the financial data to the accountant. The accountant has to analyze it to extract the essential insights for the business and advise the business owner regarding decision-making in the future. Some accounting tasks are described below-
- An accountant demonstrates and investigates the data.
- They prepare tax return reports, balance sheets, and income transactions.
- Provide suggestions to the business owner with the help of predictions of market trends and other growth opportunities.
- Assist the businessmen in knowing the consequences of economic decisions.
- Update the entries.
Accounting exercises generate statements to give you a crystal clear picture of your financial status, where you are doing best, the need to change the decisions, and your objectives in the future.
A bookkeeper is responsible for maintaining full records of the income and expenses of any organization. They prepare the regular economic transactions in a continuous and easy-to-understand way. The records of bookkeepers assist the accountants in accomplishing their jobs.
Here are some tasks of bookkeepers.
- Record economic statements
- Post debits and credits
- Generate invoices
- Complete payroll
- Balance the ledgers,subsidiaries, historical accounts
In your business, each sale and purchase should be defined in the ledger, and maintaining the ledger is the primary purpose of a bookkeeper.
A ledger can be complex or straightforward, and we need softwares like quickbooks and Xero to handle the duties/operations.
An Accountant should possess an accounting degree or any other finance associate degree. Accountants can try for other certificates such as CPA (Certified Public Accountant). An accountant can be a bookkeeper.
The accountants should have different licenses and certificates based on their experience. To be an advanced skillful accountant, you need to pass the state’s uniform CPA exam. If you pass the exam, it means you understand tax law, accounting softwares and have good communication skills.
To be a bookkeeper, one does not require any formal degree. But the thing is, he or she should be familiar with the economic terms, topics and should be able to make accurate calculations. Usually, the work of a bookkeeper is supervised by the accountant and business owner.
Other than that, a bookkeeper can not be considered as an accountant. A bookkeeper does not need to have a license and certificates because bookkeeping is not as complex as accounting.
- Bookkeeping vs Accounting
- What are the Key Importance of Accounting in The World?
- Top 7 Interesting Uses of Accounting That Business Students Must Know
The average salary of an accountant was $71,550 per annum in 2019, as per the U.S. Bureau of Labor Statistics information. On the contrary, your experience, place/city, and job performance are the factors that affect your earning. You can earn $20 per hour as a fresher, but it can reach upto $100 or more per hour.
Like an accountant, the salary of a bookkeeper also varies with various factors such as services required, experience, and market. It also depends on the financial status of the organization.
As per the Bureau of labor statistics, the average pay scale of a bookkeeper was $41,230 per annum in 2019.
Similarities of Accountant vs Bookkeeper
Accounting and bookkeeping sound similar in some aspects despite differences. We need accounting fundamentals in both the profession and both accountants and bookkeepers assist the business owner for the growth. Owing to these similarities, some small or average businesses endeavor to hire bookkeepers instead of accountants to handle the accounting operations.
Bookkeepers perform the task of producing economic reports and statements etc.
The objectives of bookkeepers and accountants are similar as they perform different tasks to reach the organization or business up to a high level.
Comparison Table of Accountant vs. Bookkeeper
|Responsibility||Explain, summarize, and convey the economic transactions to the business owner.||Recognize, segregate and record the monetary transactions of a business.|
|Performing tools||An accountant works with profit/loss, balance sheets,and cash flow records.||A bookkeeper works on journals and ledgers.|
|Skills||An accountant requires a bachelor’s degree in accounting and other analytical skills.||A bookkeeper does not need to have any specific skill set but basic knowledge of accounting is required.|
|Level of Complexity||In accounting, the level of complexity is high and accountants have to perform complicated calculations for higher degree of precision.||The level of complexity is low as they only need to record the income and expenses in a simple language.|
|Decisions||On the basis of accountants’ work or records, business owners are able to make critical decisions.||Management cannot make any decision on the information given by bookkeepers.|
|Types||Finance, cost, management, HR, Responsibilities accounting.||Single EntryDouble EntryVirtual.|
When to hire an accountant or bookkeeper
In the above text, we demonstrate the similarities and differences of accountant vs. bookkeeper. Now you know who suits you for managing your business operations. In addition, we are giving you the situations when you should hire one of them in order to lessen the losses.
You need to hire an accountant when your taxes are complex, and you cannot manage them alone. Accountants are tax compliant and can save your time in this process.
When the tasks are time-consuming
If your accounting tasks are time-consuming and you are wasting your time to manage them rather than focusing on the growth of the Business. It is time you should seek the help of experts and need to follow them for better opportunities.
When your Business is growing day by day
Everyone thinks that their Business should grow by leaps and bounds. If you run a small business, it is okay to manage all the operations on your own. But if your Business is growing consistently, then you need a bookkeeper to balance the books monthly and an accountant to investigate the activities of the Business.
A Bookkeeper and an accountant both are important for the growth of the Business. They perform their best to access the services of any organization in the market. Get the best management accounting assignment help from our experts.
If you are looking for the long-term success of your Business with the help of structured economic records, both bookkeepers and accountants play a crucial role in this.
In this blog, we have explained the various roles of accountant vs. bookkeeper with other features. Now, you can decide which one you need to organize your business practices. With the help of this article, I hope you can determine where you have to go and what you need for your business growth.
Frequently Asked Questions
Both the professions are best and play their different roles of responsibility in an organization. But the bookkeeping jobs are simple and do not require any specific skills to handle the responsibility, whereas accounting requires a skill set and degree in the accounting field.
Accounting jobs are complex as compared to bookkeeping jobs, whereas the salaries are opposite. An Accountant earns more money than a bookkeeper. You can pursue any career by analyzing their complexity level, pay scale, and growth opportunities.
Accounting softwares– In accounting, we use various softwares to perform different operations such as Quickbooks, Xero, Wave, FreshBooks, and more.
Bookkeeping Softwares- In bookkeeping, we use the same softwares because bookkeeping is part of accounting. We use Zoho Books, Odoo accounting, Sage Intacct, etc., software which are accounting softwares.
Accountants and bookkeepers perform different operations with the same objective. They use numerous softwares to manage the company’s account efficiently, to enhance efficiency and security purposes.