One of the biggest mysterious for those who are either not in business or new to business is understanding the difference between an accountant and a bookkeeper. It can be very difficult to understand the difference, but the two have stark differences that matter strongly when they’re hired to a business. So here are 2 differences between bookkeepers and accountants.
Accountants do it All
The job of accounting involves making a record of all finances of a business, organizing that information, analyzing it, making projections and using the data to help the business become as efficient as possible. It’s a highly specialized skill that not everyone has.
A bookkeeper, on the other hand, has one job and one job only. To keep a financial record for the business.
An accountant can do the job of a bookkeeper, but a bookkeeper cannot do the job of an accountant. Think of accounting as a large house where each room has a different function. Bookkeeping is one of the rooms in the larger house of accounting.
Bookkeepers Are Trained Differently From Accountants
Accounting is a highly specialized skill that requires at least a bachelor’s degree. No one can learn accounting through on the job training alone. While bookkeeping still requires plenty of practice, experience, and training, it is not nearly as thorough and academic as it is in accounting.
Again, the big difference is that bookkeepers only need to record the data. Analyzing is a completely different skill that requires higher education.
Usually businesses hire both a bookkeeper for the records, and an accountant who knows what to do with the books. Accountants often oversee bookkeepers and double check their work as well.
To break it down even further, here’s a list of what bookkeepers are expected to do.
- Process receipts, payments, invoices, and transactions
- Manage Accounts Payable and Accounts Receivable
- Reconcile Accounts
And here is what Accountants are expected to do on top of bookkeeping.
- Provide Tax advice
- Business consulting
If you’re a small business owner, you need to understand the differences between these services so that you can hire the right bookkeeper for your business. Be sure to do your research, understand how a bookkeeper can best help your business, and consider asking if you need an accountant as well.