April 18, 2024

Business Bib

Business & Finance Blog

Bookkeeper vs. Accountant: What Are the Differences?

3 min read

Bookkeeping and accounting can be thought of as two sides of the same coin. Both share a common goal: to ensure the financial health of your business. The difference between bookkeepers and accountants is that they are responsible for different phases of the accounting process. 

It may be helpful to bring someone on to support the company’s finances depending on the needs of your business. This means you can refocus your energy on strategy, growth, and people management.

Are you thinking of bringing on an accountant or a bookkeeper? Read on to understand the role of a bookkeeper vs. accountant and determine the best fit for your business. 

Understanding the Role of a Bookkeeper vs. Accountant 

Accountants and bookkeepers are both interested in documenting and analyzing the financial health of your company. It is often said that where bookkeeping ends, accounting begins.  

A bookkeeper will be involved in the daily transactions of your company and document them rigorously for reference. Their primary goal is to be an accurate record-keeper of the company’s dealings. An accountant will then use the information provided by a bookkeeper to analyze and understand the company’s finances. They can then use this analysis to inform future decision-making. 

What is a Bookkeeper

Bookkeepers typically focus on the day-to-day financial activity – they take a 1000 ft view of your business. Bookkeepers daily tasks will vary by business, but typically include: 

  • Recording and categorizing payments, expenses, and invoices
  • Overseeing payments to customers & suppliers 
  • Processing payroll and monthly financial statements 
  • Preparing tax documents and year-end statements for an accountant

A major difference between bookkeepers and accountants is that bookkeepers are not required to have a license. Most will typically complete a certification to become a bookkeeper. The requisite qualifications do vary by country, so be sure to check local regulations and use this to inform your recruitment. 

What is an Accountant

If bookkeepers operate at 1000ft, accountants take a 10,000ft view of your business to assess its overall health. Accountants evaluate, the business’ profitability. They have an understanding its cash flow, and forecast the financials to inform your future business strategy.
Functionally, an accountant will: 

  • Review and adjust the business’ financial statements 
  • Analyze the finances to assist you in making and understanding financial decisions 
  • File annual tax returns 

Most qualified accountants will have at minimum completed an undergraduate degree in accounting. Or they may have finance degree which generally acts as an apt substitute. To be a certified accountant, they will have had to complete the Certified Public Accountant exam. They will also have to have received enough professional accounting experience. All of these factors will influence the cost of an accountant

A Dynamic Duo

Understanding the roles of a bookkeeper vs. accountant will better inform your decision to manage your finances. independently, or bring in the right person to help. 

A combination of the two will contribute to the financial success of your business. A rigorous bookkeeper will accurately records finances. A savvy accountant will analyze the financial health of the company and help you make better decisions.

Looking for more bookkeeper tips? Check out the rest of the blog.