10 Jun A Bookkeeper vs an Accountant
All small businesses need bookkeeping. Sometimes it can be difficult understanding the difference between a bookkeeper vs an accountant. The terms “accountant” and “bookkeeper” are often interchanged and misinterpreted. This can be confusing. Business owners, entrepreneurs, bankers, and even bookkeepers and accountants ask this question all the time. We try to keep things simple at The Heroes Group, so you’ll sometimes see us interchange “bookkeeper” and “accountant”, even when we shouldn’t. At the end of the day, for most small businesses in America there isn’t an issue with switching these terms back and forth. Our word of advice is to be cognizant of the difference when conducting business with bookkeepers and accountants.
Bookkeepers & Bookkeeping
What is bookkeeping? Bookkeeping is the process of recording transactions that occur for a business, such as sales, purchases and checks.
What do bookkeepers do? In simple terms, a bookkeeper takes all the paperwork that accumulates from running a business and enters that data into the company’s accounting system. They also maintain ledgers of information such as people that owe you money, people that you owe money to, and keep a listing of your capital assets (i.e. desks, computers and equipment, etc.). Bookkeepers are also great at payroll. The tasks of a bookkeeper vary with the complexity of a business. The bookkeeping for a business with a few hundred transactions a month will differ greatly from one that has a few thousand transactions in a month. It is the bookkeeper’s responsibility to ensure there is a copy of the appropriate paperwork for each transaction so that business owners (and the IRS) can understand what each transaction is. Software packages such as Xero, Receipt Bank and ZenPayroll help make sure that all of your records are taken care of and properly documented.
Who can be a bookkeeper? In order to be a great bookkeeper, a person should have or be working towards their associate degree or have two to four years of bookkeeping experience. Bookkeepers are often highly detail-oriented, passionate about accuracy, and sticklers for fine print. A bookkeeper is typically overseen by an accountant.
Accountants & Accounting
What is accounting? Accounting is the measurement of financial information (usually gathered by the bookkeeper) that helps stakeholders such as managers, owners and investors make important financial decisions about their business.
What do accountants do? Accountants prepare the financial statements based on the data prepared by the bookkeeper. Adjustments are usually made to the financial statements to correct for timing differences (such as paying for something today that you won’t receive for a few months). They handle a plethora of other tasks including analyzing data, preparing tax returns, monitoring key performance indicators, etc. (the list can go on for days).
Who can be an accountant? Accountants often have multiple degrees such as their Bachelor’s degree and a Masters degree in Accountancy, Accounting, Taxation or Business. They also have the ability to pursue additional certifications and licenses such as their CPA (Certified Public Accounting) and CGMA (Chartered Global Management Accountant).
The Bottom Line
At the end of the day, you need a qualified team of bookkeepers and accountants working hand in hand. The key to their success is being able to produce information that is simple and accurate so you can run your business.
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