What is the difference between bookkeepers and accountants?

It might be difficult to maintain track of your money on your own as your company expands to incorporate additional customers, vendors, and employees.

When your small business's bookkeeping and accounting chores become too much for you to handle on your own, it's time to seek help. Do you, however, require the services of a bookkeeper or accountant? There is considerable overlap in what they perform, and the names are occasionally used interchangeably, but there are significant differences.

Accounting vs. bookkeeping

Bookkeeping is a transactional and administrative position that records financial transactions such as purchases, receipts, sales, and payments on a daily basis. Accounting is more subjective, delivering financial insights to business owners based on information gleaned from their bookkeeping records.

What is the role of a bookkeeper?

In the classic sense, bookkeeping has existed for as long as there has been business - roughly 2600 B.C. A bookkeeper's job is to keep meticulous records of every money that enters and exits a company. Bookkeepers keep track of everyday transactions in a regular, easy-to-understand manner, which helps accountants execute their duties.

Here are a few examples of typical bookkeeping tasks:

• Keeping track of financial transactions
• Debits and credits are recorded.
• Invoice creation
• Payroll administration
• Keeping ledgers, accounts, and subsidiaries in order and balancing them

Maintaining a general ledger, which is a document that records the amounts from sale and expense receipts, is one of a bookkeeper's key responsibilities. To manage its entries, debits, and credits, ledgers can range in complexity from a single sheet of paper to sophisticated bookkeeping software like QuickBooks and Xero.

What qualifications does a bookkeeper require?

To handle the books for their customers or employers, bookkeepers are not obliged to be certified, however licencing is available. Bookkeepers can be accredited and licenced by the American Institute of Professional Bookkeepers (AIPB) and the National Association of Certified Public Bookkeepers (NACPB).

Bookkeepers must have at least two years of full-time work experience and pass a national exam to become AIPB certified. Bookkeepers must participate in continuous education to keep their certification.

Bookkeepers who pass tests in small business accounting firms, small business financial management, bookkeeping, and payroll can earn credentials from the NACPB. It also has a payroll certification programme that requires further training. Bookkeepers must have 2,000 hours of work experience, pass an exam, and sign a code of conduct to acquire the certified public bookkeeper licence. To keep their licence, they must complete 24 hours of continuing education each year.

What is the role of an accountant?

Based on the financial data collected by the bookkeeper, an accountant analyses it and provides vital business insights and financial recommendations to the business owner. Here are a few examples of typical accounting tasks:

• Data verification and analysis
• Creating reports, conducting audits, and generating financial reporting records such as tax returns, income statements, and balance sheets are all part of the job.
• Providing data for projections, business trends, and growth opportunities
• Assisting the business owner in comprehending the financial implications of his or her decisions
• Making changes to the entries

The accounting process generates reports that bring critical components of your company's finances together to offer you a clear view of where your finances stand and what they imply, as well as what you can and should do about them and where you may expect your company to go in the near future.

What qualifications does an accountant require?

Depending on their expertise, licences, and certifications, accountants have a variety of qualifications. A bachelor's degree from an authorised college or university is required to work as an accountant.

A CPA is a certified public accountant who has satisfied the state's standards and passed the Uniform CPA exam. They must also keep their accreditation by meeting continuing education criteria.

When interviewing for a CPA, seek for someone who is knowledgeable about tax law, accounting software, and has excellent communication skills. They should be familiar with your sector as well as the unique needs and expectations of small enterprises.