Both bookkeepers and accountants deal with the financial transactions of a business. Historically, the key difference between the jobs has been that a bookkeeper has recorded financial transactions while an accountant has analyzed and drawn conclusions from those transactions.
As financial transaction software has proliferated and improved, businesses are seeing less of a clear-cut line between the two jobs. Bookkeeping software can now do things that only accountants did, such as generate profit-and-loss statements, and it can enable bookkeepers to more easily carry out new functions for a business, such as paying employees.
Business executives want to be able to obtain financial information at any time and in any place, so bookkeepers and accountants are both often tasked with sending info to their mobile devices.
Different Skill Sets
Even with such advances in technology, businesses, particularly those of a substantial size, are still likely to need the help of one or more experienced accountants and bookkeepers, with somewhat different skill sets, for years to come.
|Key Differences Between Bookkeeping and Accounting|
|Main Duties & Responsibilities||Involves identifying, measuring, and recording financial transactions. Keeps the records organized.||Involves summarizing, interpreting, and communicating those financial transactions. Keeps track of a business's financial situation and conveys facts and opinions to the business's owners and executives.|
|Analytical Skills Necessary?||Doesn't require much in the way of analytical skills.||Must be able to analyze data and draw conclusions from them.|
|Responsible for Financial Statements?||No, not typically.||Yes.|
|Source: Flatworld Solutions|
The Role of an Accountant
Another important distinction between the two jobs is that an accountant designs or purchases and manages the financial systems that a bookkeeper uses to record transactions.
The everyday duties of an accountant vary depending on their specialization, which might be auditing, tax preparation, or estate/trusts, for instance.
Accountants usually have a bachelor's degree in accounting or a related field. They may go on to get a master's degree in accounting or a master of business administration that focuses on accounting.
Becoming a certified public accountant (CPA) is the most important early achievement for an accounting professional. However, not all accountants are necessarily CPAs. There are other types of certifications, such as certified internal auditor (CIA), certified management accountant (CMA), and Chartered Global Management Accountant (CGMA), as well as perfectly good accountants with none of those certifications.
The Role of a Bookkeeper
A bookkeeper usually does not need a bachelor's degree to land a job. They record financial transactions for businesses, typically using database and spreadsheet programs that have been selected and set up by an accountant. Basically, a bookkeeper records all the money flowing into and out of a business.
A bookkeeper may also issue checks, prepare invoices, and create reports on taxes, expenditures, profit and loss, and cash flow. In a large firm with many employees, a bookkeeper may specialize in a particular area, such as accounts payable, accounts receivable, or auditing.