Bookkeepers and accountants are oftentimes used interchangeably. However, the tasks they perform for businesses couldn’t be more different and on different levels.
First, let’s start with a definition of bookkeeping. Bookkeeping is the recording of business transactions. Think your day to day sales activities, recording customer payments, or paying the bills.
Whereas, an accountant, as the name implies accounts or analyzes the financial data that the bookkeeper captured. So yes, a bookkeeper and an accountant do work hand in hand, but the accountant is more analytical whereas the bookkeeper is more day to day record keeping
To further explain the difference between the two, let’s examine some of the common tasks that bookkeepers and accountants do.
Bookkeepers:
Recording and categorizing banking transactions
Creating and sending invoices
Recording and paying bills
Calculating and running payroll
Bank & Credit Card Reconciliation
Producing basic financial statements, such as P&L
Tracking inventory
Accountants:
Analyze and find leakages in your financial statements
Filing Sales and Payroll Tax Returns
Producing more complex financial statements
Budgeting
Forecasting
Calculating depreciation, amortization, impairment
Factoring Accounts Receivables
Cash Management
As you can see the tasks that bookkeepers and accountants perform could not more different. Also, these tasks happen at different stages in your business financial cycle. You cannot forecast sales until all sales are properly recorded.
All businesses, no matter the industry needs both bookkeeper and accountants.
Make sure to stay engaged with us as we discuss next when it’s best to hire.