Despite sometimes being used interchangeably, bookkeeping and accounting are not the same things. Generally speaking, a bookkeeper keeps and organizes records of a business’s financial transactions, while an accountant interprets and analyzes that financial data. Both of these roles are important for your business.
While some businesses might employ both a bookkeeper and an accountant, others might have only one person responsible for both roles. However, it is important to keep in mind that while an accountant is qualified to be a bookkeeper, not all bookkeepers are qualified to be accountants.
Keep reading our Bookkeeper vs. Accountant - What Is the Difference? guide for a more detailed explanation of the differences between bookkeeping and accounting as well as how to hire an accountant or bookkeeper if needed.
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What Does a Bookkeeper Do?
A bookkeeper records the day-to-day financial transactions of a business. They keep track of the purchases a business makes, salaries, and sales. Some of the specific things bookkeepers commonly do are:
- Manage accounts receivable and accounts payable
- Produce and send invoices
- Process payroll
- Maintain general ledger
- Enter financial transactions into bookkeeping software
- Prepare financial statements
There are several financial statements that bookkeepers are often in charge of preparing. The three most common are:
- Profit & loss (P&L or income statement)
- Balance sheet
- Cash flow statement
Our Guide to Small Business Bookkeeping provides more details about some of the responsibilities bookkeepers have.
What Does an Accountant Do?
Accounting is the interpretation and analysis of financial transactions and records. While a bookkeeper largely enters facts and figures into various reports and tables, much of an accountant’s role is to provide somewhat subjective financial advice to the company.
Some of the common tasks an accountant often handles are:
- Preparing tax returns
- Performing audits
- Giving financial advice
- Adjusting financial entries
- Forecasting future financial results
- Handling corporate reporting obligations
The actual day-to-day tasks for an accountant will depend largely on their specific qualifications and on the needs of the company.
Difference Between Bookkeeper and Accountant
As mentioned above, one of the main differences between a bookkeeper and an accountant is the primary job responsibilities each one has. While there can be some overlap in roles, especially in smaller companies that don’t employ two separate positions, a bookkeeper records the day-to-day financial transactions of a business, while an accountant interprets and analyzes these financial records.
Due to these different responsibilities, bookkeepers and accountants often have different educational backgrounds and qualifications.
Bookkeepers generally aren’t required to have any specific education or formal training and certification. While the desired qualifications will vary depending on the company, it is possible to become a bookkeeper without even a bachelor’s degree.
However, many companies do require their bookkeepers to have certain levels of education and even special certifications. There are two main organizations that offer bookkeeping certifications:
- American Institute of Professional Bookkeepers (AIPB)
- National Association of Certified Public Bookkeepers (NACPB)
Each of these organizations has its own certification process, and both require additional education to maintain the certification.
Unlike bookkeepers, accountants are required to have at least a bachelor’s degree from an accredited college or university in Accounting or a related financial field.
Additionally, there are stricter requirements to become a certified public accountant (CPA). Each state has its own specific requirements, but the minimum requirements are generally 150 semester hours of college or university education, a year of professional accounting experience, and a passing grade on the CPA exam. After becoming certified, CPAs must stay up to date and complete additional education to maintain their certification.
It is important to note that some states have laws that prevent individuals from calling themselves an accountant professionally unless they are a CPA.
How to Hire a Bookkeeper or Accountant
The first step in hiring a bookkeeper or accountant is deciding if you need to hire one at all. If your business is just getting started, it may be possible to handle most financial-related tasks yourself using bookkeeping or accounting software. We’ve put together this guide for the Best Accounting Software for Small Businesses to help you with your decision.
If you don’t want to handle all these responsibilities yourself, you must decide which of the two roles you need to fill (or both) and then decide if you are looking to hire someone in a part-time or full-time position.
Using online job boards is one great way to attract potential employees. When doing this, it is important to have clear job descriptions for applicants. We have developed an accountant job description and a bookkeeper job description that you can use when hiring. These can be used as is, or you can adjust them as needed, depending on your needs.
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Bookkeeper vs. Accountant Frequently Asked Questions
Which is better bookkeeping or accounting?
Neither bookkeeping nor accounting should be considered better or worse than the other. The best option for your business depends on your own specific needs.
Do you need a bookkeeper and an accountant?
This depends on what tasks you need to get done. If you are looking for someone to keep track of your company’s financial records or handle payroll, a bookkeeper would likely be able to handle that. However, if you are looking for tax advice or financial analysis, you would likely need an accountant.
How much can a bookkeeper charge per hour?
The average rate for a part-time bookkeeper is around $20 an hour, while a full-time bookkeeper might make between $35,000 and $50,000 plus benefits.
How much does an accountant make?
The salary for accountants can vary widely depending on location and experience. CPAs with only a year or so of experience generally make between $55,000 and $85,000 per year, with more experienced accountants making more than this.
Can a bookkeeper do tax returns?
There are no rules that prevent a bookkeeper from doing tax returns. However, you may want to consider hiring a specialized tax accountant to ensure that you pay your taxes correctly and are not overpaying!
Does a bookkeeper do payroll?
Yes. Processing payroll is one common task that bookkeepers do.
Can a bookkeeper become an accountant?
A bookkeeper can become an accountant if they have the required education and certifications.