The Difference Between a Bookkeeper Vs Accountant

There’s also The National Association of Certified Public Bookkeepers which offers the Certified Public Bookkeeper (CPB) certification. If you are proficient and comfortable using mathematics and computing figures, plus punctual, organized, and detail-oriented, it is not hard to learn how to be a bookkeeper. Of course, a background in accounting practices will help you ride out a learning curve as a new bookkeeper. In addition, you must be a member of the Association of Certified Fraud Examiners.

In order to avoid the confusion caused by the sometimes blurred lines between bookkeeping and accounting, one can see them as being a part of one accounting cycle. Recording of data is a part of the process, and both accountants and bookkeepers contribute to successful tax filing. The results of work done by the bookkeeper allow the accountant to provide business forecasts, that’s why many mid- and large-sized businesses will need to hire both. Sometimes grasping the difference between bookkeeping and accounting can be tricky. Both bookkeepers and accountants work with your finances, both help make your tax reporting a smooth experience.

• You may also be expected to take on more advisory and analytical roles as bookkeeping becomes more automated.
• The BLS notes that job growth for accountants should track fairly closely with the broader economy.
• When interviewing for a CPA, look for an accountant who understands tax law and accounting software and has good communication skills.
• Diligently processed financial statements over an extended period can be a kind of insurance for you to receive the needed investment.

Mid-size and small public accounting firms pay, on average, about 10% less than these firms. If you choose to work for a company internally instead of in public accounting, the starting salary range is very broad. In most cases, private companies do not pay more than the Big Four for young accountants with little experience. Bookkeepers may start working for a small business to gain experience and then go back to school for a degree in accounting or finance. Enrolling in one of the best online bookkeeping classes is a smart way for those interested in this career to bolster their existing financial knowledge. If you need an extra hand, you can also work with a team of QuickBooks-certified bookkeepers to help you manage and maintain your books virtually.

Despite sometimes being used interchangeably, bookkeeping and accounting are not the same things. Generally speaking, a bookkeeper keeps and organizes records of a business’s financial transactions, while an accountant interprets and analyzes that financial data. You can earn certification from the National Association of Certified Public Bookkeepers (NACPB) and the American Institute of Professional Bookkeepers (AIPB). The NACPB offers a certified public bookkeeper (CPB) certification, while the CPB offers a certified bookkeeper (CB) certification. Both the CPB and CB certifications require similar eligibility requirements.

What Is Accounting?

Accountants will remain in demand because they can generally offer insights that a computer cannot match. In addition, the globalization of commerce, new and more complex tax laws, and expanding technologies may lead to new opportunities for accountants. According to BLS, the annual wage range for this profession in May 2021 was $47,970 to $128,970. Average accountant salaries are similar across all specialties, with those working in insurance and finance experiencing marginally higher incomes. Using online job boards is one great way to attract potential employees. When doing this, it is important to have clear job descriptions for applicants.

However, keep in mind that those higher living costs may cancel out the financial benefits of increased bookkeeping salaries. Bookkeeper salary levels vary by location, based on factors like local labor market conditions and local living costs. In these cases, employers may increase their pay rates to attract the best available candidates. A lot of U.S. bookkeepers get the American Institute of Professional Bookkeepers (AIPB) certification. It proves that the bookkeeper has signed the AIPB’s Code of Ethics and has successfully fulfilled its certification standards.

Those wishing to work for larger companies pass the examination necessary to become a Certified Public Accountant (CPA) granted by The American Institute of Certified Public Accountants (AICPA). Certified Public Accountants can represent their clients before the IRS, work for a public company, and assist with an array of official bureaucratic and financial matters on all levels. Typically, professionals in bookkeeping and accounting spheres work together. Careless mistakes that seem inconsequential at the time can lead to bigger, costlier, more time-consuming problems down the road. Rarely does a bookkeeper work on one big project for an eight-hour shift; instead, a typical workday involves juggling five or six smaller jobs. Nearly all bookkeeping is done using computerized accounting software and programs, so bookkeepers should be comfortable learning new technology if not proficient in it.

Ledgers can come in the form of a computerized spreadsheet, a software, or even on paper. It also keeps business owners from incurring unnecessary liabilities like debts and unpaid bills. In this guide, we’ll explain the differences between bookkeeping vs accounting in key areas that define these functions. However, these certifications are optional; people don’t need one to be a professional bookkeeper. Coursework and other continuing education programs support skill development and encourage professional networking, which can also expand your job opportunities.

You can use this as a reference to set a competitive rate or asking salary and to ensure that you’re paid accordingly. This is one of the reasons why pursuing a career in accounting is a bit more challenging. Outside of universities, certifications are available through the American Institute of Professional Bookkeepers (AIPB) and the National Association of Certified Public Bookkeepers (NACPB). Let us know what type of degree you’re looking into, and we’ll find a list of the best programs to get you there. Outsourced accounting isn’t always cheaper than in-house, so it’s good to compare the pricing by getting several quotes.

To choose accounting software, start by considering your budget and the extent of your business’s accounting needs. 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.

In  Accounting will teach you accounting best practices, industry-standard software, and financial analysis skills that will set you up for success. Accountants are also projected to be highly sought-after over the next 10 years. The growth projection for accountants is 6.1%, while job demand for the bookkeeping profession is expected to decline by 1.9%. This decline can be attributed to the role of technology in automating many of the transactional functions of bookkeepers. Popular software has made it possible for many business owners to track their financial information, while accountants provide deeper insights and advice that software can’t replicate. Here’s an easy way to think about it—bookkeepers lay the groundwork by recording financial transactions so that accountants can analyze financial statements and provide strategic recommendations.

Average salary for bookkeepers

While the companies do not publish salaries on their websites, the benefits can be a large draw. For example, KPMG offers employees up to 25 days of paid vacation time, telecommuting opportunities, and a robust health insurance package. Some of the key tasks for accountants include tax return preparation, conducting routine reviews of various financial statements, and performing account analysis.

Accountant Qualifications

To earn the certified public bookkeeper license, bookkeepers must have 2,000 hours of work experience, pass an exam and sign a code of conduct. They must take 24 hours of continuing education each year to maintain their license. Bookkeeping and accounting are sometimes used interchangeably—but there are distinct differences between these roles.

Bookkeeping vs. Accounting FAQ

It is not an unusual career move for a bookkeeper to gain experience at a job, study, get certified, and work as an accountant. Bookkeepers are commonly responsible for recording journal entries and conducting bank reconciliations. A bookkeeper must be able to shift focus easily and catch tiny, hidden mistakes in a budget or invoice. They often bookkeepers salary paycheck calculator work a few jobs for various clients if they work as a consultant. When deciding whether you should hire an accountant vs a bookkeeper, the answer will depend on what kind of help your business needs. A bookkeeper will complete these steps and use the chart of accounts to post every journal entry and financial transaction within the general ledger.

Create financial reports.

Good bookkeepers are organized, skilled with numbers, and natural problem-solvers. If you have a more analytical and strategic mind, the accounting profession may provide the type of challenges that excite you. If you prefer tasks that require attention to detail, involve working with computer programs and financial data, and require good math knowledge, bookkeeping might be a better fit. A bookkeeper or accountant who chooses to work independently as a consultant or freelancer may benefit from business-related courses. If this is your chosen career path, you can earn a small-business management certificate to learn how to operate your own business. Bookkeepers generally aren’t required to have any specific education or formal training and certification.

Industry newcomers tend to use the terms “bookkeeper” and “accountant” interchangeably, but there are a few important distinctions between the two. The top three skills for a Bookkeeper include Payroll Tax Returns, Customer Service and Reconciliations. Most important skills for a Staff Accountant are Reconciliations, Account Reconciliations and GAAP. Learn from our students and alumni who pursued their educational goals at University of Phoenix while balancing school, work and life. It is important to note that some states have laws that prevent individuals from calling themselves an accountant professionally unless they are a CPA. Kelly is an SMB Editor specializing in starting and marketing new ventures.

In turn, the accountant will deal with more complicated transactions, will review the financial statements, and will assist management in the planning and control of the organization. However, bookkeeping and accounting clerk jobs are expected to decline, with the BLS projecting a 5% fall in jobs over the same period. The BLS notes that job growth for accountants should track fairly closely with the broader economy. However, bookkeepers will face pressure from automation and technology that will reduce the demand for such workers.