Difference between an accountant and a bookkeeper. Do you need both?
Most people think that Accounting and Bookkeeping are one in the same but there are major distinctions. Bookkeepers oversee the recording of financial transactions while Accountants are responsible for interpreting, classifying, analyzing, reporting and summarizing financial data. Read on as we break-down the differences between these two roles and how they can work together for your business.
Bookkeepers tend to the first important step of the accounting process = Recording financial transactions in chronological order on a daily basis. Bookkeepers record your business’s daily transactions and generate data, in the same way, every time in a cyclical and transactional method.
Because accounting software automates many of the processes, some bookkeepers in small organizations also classify and summarize financial data in financial reports. These bookkeepers are often referred to as Full-Charge Bookkeepers.
Accountants analyze financial transactions in financial statements and business reports following accounting principles, standards and requirements. Accountants verify and analyze and interpret financial data in a subjective manner in order to a make sense out of your data and report the financial condition and performance of your business to company leaders to help them make informed business decisions.
Let’s break it down even further.
Bookkeepers usually:
record purchases, receipts, and payments
invoice customers
balance the general ledger
process payroll
Accountants usually:
generate financial statements and reports
analyze the cost of operations
file income tax returns
advise business owners
Whether you are just starting off or have been in business for some time, it’s best to have both a bookkeeper and an accountant to help you manage and navigate unexpected issues that may arise. Learn more about our Bookkeeping Services on our services page. It’s one less thing that you as a business owner have to worry about.