Bookkeeper Vs Accountant: What is the difference?

When asked to describe the difference between an accountant and a bookkeeper, the majority of individuals would struggle.

Despite the fact that various financial jobs have similar objectives, they provide help at different stages of the accounting process. As a business owner, it's critical to understand the distinction between the two.

The parallels and distinctions between accounting and bookkeeping, as well as how to select which to hire, are discussed.

When should you start looking for financial backing for your business? There are several factors to consider.

Why your accounting and bookkeeping team requires accounting cloud solutions as well as cloud bookkeeping services is explained below.

The parallels and contrasts between accounting and bookkeeping

Accounting is the practise of maintaining financial records for a corporation by the recording, summarising, analysing, consulting, and reporting of transactions and financial information. Accounting responsibilities are often carried out by certified professional accountants (CPAs).

Keeping financial records for a firm, including day-to-day transactions, is the record-keeping portion of the process, and it is accomplished through the use of bookkeeping software and a database. Bookkeepers are not required to hold a licence, but they may choose to do so if they like. The certificates or licences that are required are usually determined by the location of the individual or the location of the individual's employment. ¹

Accounting takes over where bookkeeping leaves off.

Because bookkeeping is a component of the accounting process, the work of bookkeepers and accountants frequently overlaps.

A bookkeeper is responsible for keeping track of and classifying a company's financial transactions on a daily basis (e.g., sales, payroll, payment of bills, etc.). Their primary focus is on maintaining reliable records, with less attention paid to data interpretation and analytics.

The information provided to the accountant by the bookkeeper serves as the foundation for their work. Typically, they'll do the following:

• Examine the financial statements that have been created by a bookkeeper.
• Analyze and interpret the facts you have gathered.
• Create a report based on the information (or records) you have.
• Distribute recommendations based on what they've reported.

In turn, the records recorded by the bookkeeper will determine the accountant's advise to the company's leadership and, in the long run, the general health of the company. Each step in the financial process is equally as significant as the one that comes before it.

Which do you require: a bookkeeper or an accountant?

You must determine if you need to engage a bookkeeper or an accountant before proceeding with the hiring process. This decision is mostly influenced by the industry in question and the amount of skill necessary.

A bookkeeper's job description often includes the following duties:

• Employers are less expensive to hire.
• This is an excellent option for processing daily transactions.

If, on the other hand, you require insight and advise on how to better conduct your firm at scale, you will require the assistance of an accountant.

Here are some questions to think about when making your decision that are relevant to the industry:

• What is the size of your inventory?
• How many people do you have on your payroll?
• What is your line of work?

Accountants are required in industries that deal with complicated financial systems and large volumes of transactions (i.e., government agencies, colleges, hospitals, etc.).

A competent and skilled bookkeeper with years of experience is—most likely—better prepared to run the books for your company than a new accounting degree graduate who is just getting started.

Keep this in mind when screening applications; avoid making snap judgments about applicants based only on their educational background.

When evaluating a candidate, keep the following questions in mind:

• What is the extent of their knowledge and experience? Do they have any accreditations or certifications?
• What kind of services does the individual have to provide?
• What types of services does the individual have previous experience providing?

Offering accounting and advising services to clients will be mandatory in 2022.We have also accounting software that will help you to manage your accounts in London.