The Differences Between a Bookkeeper and Accountant


New entrepreneurs (and even those who have been in the business for years) often make the mistake of confusing bookkeepers and accountants. The two functions are certainly related, but their roles are very different. Understanding these differences can help you better understand your financial management.

Bookkeepers manage financial data

The role of an accountant is to record the transitions on a daily basis and ensure that records are kept in a consistent and reliable manner. They ensure that all financial transactions of your company are recorded, including all debits and credits, and also create invoices for any financial need. They also work hard to balance your ledges and complete payroll.

The methods they use to manage this include receipt tracking, spreadsheet software, and various online payroll methods. They do not process the financial information as such, but ensure that all information is accurate and detailed for accountants.

Accountants manage that information

Accountants take the information prepared by an accountant and manage it at a deeper level. For example, they will prepare important financial statements to give your business a sense of where the money is going back and forth. They analyze your company’s write-offs and credits, isolate where you’re losing money, and help you make important business decisions.

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While good bookkeeping is a necessary part of bookkeeping, many bookkeepers are unable to perform the bookkeeping duties properly. They usually lack the training to do this, which is not to belittle their role or skills. Accountants are simply trained to fully understand the financial flow while accountants are trained to keep that financial information organized and presentable.

Decide what you need

If you understand basic accounting techniques and you run a small business, you may just need an accountant to help you make financial decisions. That said, bookkeepers still play a vital role, even for entrepreneurs. Most will not want to mess around with this type of information given their busy work or are more interested in making important business decisions.

That’s when an accountant is so important. They keep track of your financial information, make it easy to understand, and help your accountants understand the ins and outs of your financial situation. Accountants really appreciate bookkeepers for making their job a lot easier.

When it comes down to it, it’s not a bad idea to hire at least one bookkeeper and accountant early in your business life. Even if that tightens up your financial situation for a while, it can help you divert your attention from these issues and focus on more important business decisions, such as new investment opportunities.

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