Accountants are largely responsible for the financial health of a business. If they notice expenses are going over budget or under budget, they can look into what’s causing this discrepancy and make recommendations to resolve these problems. If you are an external auditor, you will most likely have a job at a public accounting firm, and you will need to have a CPA license, plus a college degree, and often a master’s degree.

• In order to avoid the confusion caused by the sometimes blurred lines between bookkeeping and accounting, one can see them as being a part of one accounting cycle.
• Bookkeepers focus on recording and organizing financial transactions, while accountants focus on interpreting and analyzing financial data.
• For those that don’t have a specific degree in accounting, finance degrees are often considered an adequate substitute.
• A bookkeeper in an office may also be responsible for managing payroll, doing taxes, ordering office supplies, and other important organisational office tasks, depending on the place of work.

Many small business owners attempt to save money by performing the recordkeeping duties of a bookkeeper themselves with the help of automated software, such as Intuit or Quickbooks. This can help save money and keep a small business lean, although it requires a major time commitment and meticulous attention to detail from the business owner. When it comes to deciding between one or the other, think of them as a pair working in tandem. Check out our reviews of the best accounting software for small businesses so you can create invoices, record payments, collect receivables and run reports that help you manage your financial health.

Accountant Duties

Both bookkeepers and accountants are eligible to become professionally certified. Accountants rely on the accuracy of the financial information provided by the bookkeeper or business owner to do their job well. Their financial analyses and strategies are only as good as the data they’re provided with. It also keeps business owners from incurring unnecessary liabilities like debts and unpaid bills. The general ledger is a basic document where a bookkeeper records the amounts from sale and expense receipts.

• For example, accountants with sufficient experience and education can obtain the title of Certified Public Accountant (CPA), one of the most common types of accounting designations.
• A trusted accountant can help guide you through that process and help handle any audits that may arise.
• All small-business owners should consider hiring a professional accountant to handle their tax returns, at the least.
• They also help identify potential financial risks and develop strategies to mitigate them.

A bookkeeper is not an accountant, nor should they be considered an accountant. The overall best bookkeeping software includes Zoho Books, FreshBooks, Xero, and Intuit QuickBooks. If you are good at math and have an eye for detail, bookkeeping is not too hard to learn. These are key skills for bookkeepers, so if you’re not a fan of math at all, it may not be the best career path.

Bookkeeping vs. Accounting

Bookkeeping and accounting are two terms that are often used interchangeably. While both professions deal with financial data, there are subtle differences that set them apart. The main distinguishing factor between the two is the level of analysis and decision-making involved in their work. Bookkeeping is largely transactional and administrative, focusing on the accurate recording of financial events. Accounting, on the other hand, is analytical and advisory, involving the interpretation and use of financial data for decision-making.

Key Responsibilities of Accountants

Accounting turns the information from the general ledger into insights that reveal the bigger picture of the business, and the path the company is progressing on. Business owners will often look to accountants for help with strategic tax planning, analysing their financial position, forecasting, and tax filing. Bookkeeping is a transactional and administrative role that handles the day-to-day tasks of recording financial transactions, including purchases, receipts, sales and payments.

Bookkeeping vs Accounting: What’s The Difference?

Accountants, on the other hand, tend to use the bookkeeper’s inputs to create financial statements and periodically review and analyze the financial information recorded by bookkeepers. We’ve listed some of the key differences when it comes to the requirements and job market for each. Another significant distinguishing factor between accountants and bookkeepers is the depth of analytical skills required for their roles. Now that we have a clear understanding of the basic responsibilities of bookkeepers and accountants, let’s explore the main factors that distinguish these two roles. If you’re ready to take bookkeeping off your plate and delegate this task to someone else, it can be hard to know where to look. Start by reaching out to other business owners for recommendations, searching online for providers and checking out reviews on Google or Yelp.

If you plan to hire a bookkeeper or accountant, make sure to ask your potential hire what they are comfortable and experienced in doing. Also, ensure that their offerings align with your business needs and can help you achieve desired results. Another component of finding the right fit with an accountant or bookkeeper is knowing your needs.

When interviewing for a CPA, look for an accountant who understands tax law and accounting software and has good communication skills. They should understand your industry and the unique needs and requirements of small businesses. Accountants advise leadership on how to make more strategic financial changes that save the company money or generate more profit.

In the not-so-distant past, most software was housed on a computer’s hard drive. With cloud-based software, the application is hosted online and the user’s computer is simply a portal for accessing the tool. Entrepreneurs and industry leaders share their best advice on how to take your company to the next level.

Accountants

For some of the businesses that they do, accountants also need to be registered certified public accountants (CPAs). To become an accountant, one typically needs at real estate accounting least a bachelor’s degree in accounting or a related field. Many accountants pursue certifications, such as the Certified Public Accountant (CPA) certification.