The Difference Between a Bookkeeper and Accountant

Bookeepers and Accountants

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In short, the difference between an accountant and a bookkeeper is that the bookkeeper is tasked with recording financial transactions while an accountant analyzes those transactions.

This is a typical question for new home-business owners. When many home businesses launch, the owner may act as the bookkeeper, accountant or both. But eventually, the owner may find that the business is better served by outsourcing one or both of these functions.

Depending on the complexity of the business's finances, the owner may have the knowledge to do bookkeeping but necessarily the time. She may need to ask herself if her time isn't better spent on other tasks, such as long-term planning, sales, employee management, etc.

On the other hand, an owner may find that as her business expands her knowledge of accounting, taxes and other financial issues may not be enough to grow the business.

In both scenarios bringing in a professional can free up the owner's time and bring invaluable expertise. If you are a small business owner, who is doing (or considering doing) her own accounting or bookkeeping you may find these resources helpful:

The Role of an Accountant

An accountant creates and analyzes financial reports as well as designs and manages the financial systems that bookkeepers use to record transactions. The duties of an accountant vary widely depending on specialization, which might be auditing or tax preparation.

A certified public accountant (CPA) has legal certification in the United States. However, not all accountants are necessarily CPAs. There are other types of certifications, such as certified internal auditors (CIAs) and certified management accountants (CMAs), as well as accountants with no legal certifications.

The Role of a Bookkeeper

A bookkeeper performs the everyday accounting-related tasks of recording financial transactions for businesses. Using database and spreadsheet programs, a bookkeeper records all the money flowing in and out of a business.

A bookkeeper may also prepare payroll, issue checks, and invoices and create reports on taxes, expenditures, profit and loss, and cash flow. In large firms, a bookkeeper may specialize in areas like accounts receivable or auditing.

Small business bookkeepers are usually generalists who handle many tasks. Small-business owners may also want to consider hiring a company to provide bookkeeping services.