The biggest difference between the two is the educational background, certification, and licenses. Bookkeeper and accountant are terms that are sometimes used interchangeably and while what they do may overlap at times, there are some very distinct differences between the two. The two roles can have a significant impact on the success of your business.
To maintain the credential, bookkeepers are required to engage in continuing education. Both accounting and bookkeeping play an important financial role in business, there is a difference between the two. An accountant can be considered a bookkeeper, but a bookkeeper can’t be an accountant without proper certification. When a bookkeeper wants to leap to being an accountant, they will need to take the CPA exam, plus earn a bachelor’s degree (most of the time), if they do not have one already.
What Is Bookkeeping?
Additionally, an accountant has an average salary of $54,890, which is higher than the $40,337 average annual salary of a bookkeeper. Every business step requires capital, from transforming an idea into a model to investing in its expansion. As a professional bookkeeper, you would keep track of a company’s bookkeeper vs accountant salary financial transactions and record them in the general ledger accounts. Your job as a bookkeeper entails systematically keeping track of an organization’s financial transactions. For the information to be reported as a financial statement, it needs to be identified, accepted, classified, and recorded.
- Accountants can become a Certified Public Accountant (CPA) by passing the Uniform Certified Public Accountant exam.
- If you are already a CPA, you can act as an enrolled agent without passing the exam.
- An accountant can be considered a bookkeeper, but a bookkeeper can’t be an accountant without proper certification.
- A strong endorsement from a trusted colleague or years of experience are important factors when hiring a bookkeeper.
- CFAs or chartered financial analysts are knowledgeable about global markets, investment analysis, ethical financial practices, and portfolio management.
- Accounting assistants may assist with these activities, but usually in a support role rather than a hands-on one.
Ultimately, your circumstance determines whether a bookkeeping certification would be worth it for you. Junior bookkeepers looking to establish themselves in the field are arguably more likely to benefit from certification. Experienced bookkeepers, on the other hand, may not see a significant return on investment. If you’re just launching your bookkeeping career, a professional certification can set you apart from the competition. This credential can boost your credibility in the eyes of potential employers, especially if you’re just breaking into the job market.
Why People Confuse Bookkeepers for Accountants and Vice Versa
As both professions engage in managing finances, a lot of people may confuse a bookkeeper for an accountant, and vice-versa. While they work towards a common goal, bookkeepers and accountants support the business in different ways, and in different stages of the financial process. Awarded by the CFA Institute, the CFA certification is one of the most respected designations in accounting. In this program, accountants learn about portfolio management, ethical financial practices, investment analysis and global markets.
Some accountants have a bachelor’s degree in accounting but no CPA certification. Rather your business is large or small, you need an understanding of your accounting needs. As a business leader, you should have a good idea of which professionals best suit the needs of your company. As such, it’s important to know whether you need a bookkeeper or an accountant to keep track of your affairs. We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
Bookkeeping vs. Accounting: A Small Business Guide to the Differences
Managing the general ledger is part of your daily responsibilities as a bookkeeper. You may determine if any payments are due, submit them, and record them in the financial ledger. As a bookkeeper, you may also receive client payments and deposit them at your company’s financial institution.
They can also help businesses efficiently deal with corporate taxes and any legal issues. Accountants advise leadership on how to make more strategic financial changes that save the company money or generate more profit. For some of the businesses that they do, accountants also need to be registered certified public accountants (CPAs). Bookkeeping is the daily financial tracking of all of your daily financial transactions. The bookkeeper of a business might choose to use online bookkeeping software to track everything. AIPB certification requires bookkeepers to have at least two years of full-time work experience and pass a national exam.
