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Are you thinking about hiring a bookkeeper, an accountant, or both? What is the difference between a bookkeeper and an accountant? We will shed a little light on the roles and responsibilities, highlighting the differences between an accountant and a bookkeeper. In general terms, a bookkeeper is responsible or accountable for processing your business’s day-to-day financial tasks, reconciling your accounts, and publishing your financial statements. An accountant provides insights into how your business is performing and can offer advice to help business owners make better financial decisions.

Are bookkeeping and accounting the same?

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The short answer is no, bookkeepers and accountants are not the same. In comparison, bookkeepers perform tasks that need to be completed to have clean financial statements, accountants, review and advise businesses on many different financial issues. Accountants use the financial reports that are created by bookkeepers to provide their clients with advice. While an accountant can offer bookkeeping services, a bookkeeper cannot offer the services of an accountant. These terms are often incorrectly used interchangeably, and while some of the functionality overlaps, there are significant differences in the services and value that both bookkeepers and accountants provide.

Is a bookkeeper an accountant?

In many small businesses, the duties and responsibilities of a bookkeeper and accountant can become convoluted. A bookkeeper does not have the training or education to provide financial analysis and insights. While bookkeepers perform accountant based tasks, they are not considered an accountant. It is essential to understand this as you consider what services your business needs to manage your finances.

What are the duties and responsibilities of a bookkeeper?

difference between bookkeeping and accounting

A bookkeeper performs all the daily, weekly, and monthly financial transactions required by a business. The bookkeeper prepares a management report package containing financial reports and other helpful information:

  • Profit and Loss or income statement is a detailed report of revenue and expenses for the month or specified time frame.
  • A Balance Sheet is a snapshot or financial summary of assets and liabilities essential for the owner to understand its financial position.
  • Statement of Cash Flow is the overall activity of cash coming into and leaving the business.
  • Accounts receivable and accounts payable detail provides insight into the revenue (receivable) you have coming in and the expenses (payable) you have paid out.

Some bookkeepers assist with other financial and financially related tasks such as bank reconciliations, credit card reconciliation, sales tax calculation, payroll, budgeting, and tax preparation for annual tax returns.

What is the role of an accountant?

An accountant examines the overall financial picture of your business. Accountants are educated and skilled in data analysis to help you make financial decisions that can impact your business’s health and growth. Some of the services an accountant provides are:

  • Review and audit of financial statements
  • Review and advise on financial decision making
  • Prepare and file tax returns
  • Reviews the income statement and balance sheet
  • Acts as an advisor on financial decisions and purchases for the business

Accountants can perform bookkeeping tasks, but their services can be too costly for a small business. Hiring a bookkeeper or utilizing an automated bookkeeping application is preferred by many business owners.

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Some of the decisions business owners need to make should be reviewed by their accountant to ensure they are making the best financial decisions for their business. A few examples include:

  • The purchase of a new piece of equipment. An accountant can help you project how much new business you will need to generate to create a return on your investment. They can also advise on how the equipment should be paid for and the depreciation schedule.
  • Helping you minimize your tax liability. There are numerous tax strategies that your accountant can help you with, including a review of your corporate structure and choosing the proper accounting method.
  • Assisting you with selling your business. In this case, your accountant may bring in other experts, but they can also provide various reports a prospective buyer will be looking for.

What does it mean to be a CPA in accounting?

According to, “A Certified Public Accountant (CPA) is an accountant who has met state licensing requirements. Although requirements vary by state, they typically include minimum education (usually a bachelor’s degree in accounting) and experience requirements, plus passing the CPA exam.

CPAs also have to complete 40 hours of continuing professional education every year. The CPA credential is considered by many people to represent the commitment of an accountant to meeting high standards.”

While not all accountants are CPAs, all CPAs are accountants. Some small businesses don’t need to hire CPA’s as there are accountants that can provide various services we’ve mentioned in this post. However, if you need your financial statements reviewed or audited, this will require a CPA. In addition, CPA’s are highly trained and can offer high levels of insights and advice on all financial management matters that your business may require.

Bookkeeper vs. Accountant?

Do I need both a bookkeeper and an accountant? Yes. Many small business owners perform bookkeeping tasks taking them away from growing the business. Hiring a bookkeeper ensures that transactional and administrative-accounting functions are correctly executed, and monthly financials are completed.

An accountant understands and analyzes the data providing insight, analysis, tax planning, and strategies. At a minimum, a business owner should have an accountant to provide them with tax planning and preparation. However, as your business grows, having a CPA is strongly recommended.

What to consider when hiring a financial professional?

typical bookkeeper duties

We hope we were able to help you understand the difference between a bookkeeper and an accountant. Understanding what your business needs to fiscally function is the first step before hiring a financial professional.  Identify areas of concern or tasks that you are unable or unsure of performing yourself. Take the time to interview both a bookkeeper and an accountant.

Automated bookkeeping applications can provide a business owner with simple and easy to use tools for essential bookkeeping functions such as understanding your finances, cash flow, and keeping clean books.

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