Does your small business need a bookkeeper or an accountant? Both of these professionals may perform some accounting or bookkeeping work. However, you need to understand the difference between these two functions before you can decide which kind of help that you will need.
Bookkeepers Vs. Accountants
A bookkeeper’s job is to keep records of financial transactions. These days, most bookkeepers use accounting software; however, it’s possible to keep books in paper ledgers or spreadsheet software as well. While it’s good to have an experienced bookkeeper, this kind of work can usually be done by somebody who has a high school education and some training in bookkeeping practices and software. Bookkeepers may work closely with accountants, but in some cases, experienced bookkeepers also work independently.
In contrast, an accountant typically uses these financial and accounting records to perform more professional work. For instance, an accountant might prepare financial statements, prepare tax returns, and even provide advice about the advantages or disadvantages of different financial choices. Businesses might rely upon an accountant to do some bookkeeping work, but in general, they are used for more “big picture” kinds of duties. It’s likely that larger businesses have accountants to set up the bookkeeping system in the first place, but they may not perform day-to-day bookkeeping tasks.
Typically, accountants will have at least a four-year degree in accounting. These days, many also have completed a graduate program. CPAs also have to complete other requirements for gaining accounting experience and taking the required number of credits before they can get certified by the state. Becoming a CPA takes quite a long time and lots of studying.
Typically, Bookkeepers Work For Accountants
Your business might only have a bookkeeper. If your business is very small, you might even handle some of these chores with your own accounting software. However, you might use an accountant or accounting firm to help you with more specialized tasks and also to offer your company advice about good bookkeeping practices. You might also contract out book keeping services, so you can focus on your other tasks.
In larger companies, you might find accountants overseeing the work of many bookkeepers. The accountant will make decisions about the proper way to keep financial records, and then the bookkeepers will actually handle the day-to-day work of overseeing these records.
Training For Bookkeepers And Accountants
If you’re interested in one of these two professions as a career, you should know that the demand is expected to increase. Companies always need people to help them make financial decisions and to make certain that every transaction gets properly recorded. Complex rules and regulations make this job critical.
It’s easier to get started in the bookkeeping profession with some training about basic bookkeeping methods and popular software. Becoming a CPA or even an accountant who is not certified may take years of study and work. Either way, the effort you take to become an accountant or bookkeeper is likely to be a very good investment in your future career.