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What Is The Difference Between An Accountant And A Bookkeeper?

As a small business owner, selecting the team that you work with, both for internal and external help is a huge part of your success. Understanding the role that an employee or professional service can play in that success is the first step to reaching it. Nowhere is this more important than when it comes to the professionals who help you track, manage, and plan your finances.

In today’s blog from the bookkeeping and accounting experts at Innovative Accounting, we will discuss the similarities, differences, and roles that differentiate bookkeepers and accountants. Hopefully, this will help you decide which one(s) you are in the greatest need of to support your business’ needs and success.

Innovative Accounting offers both professional bookkeeping and certified accountancy for businesses of all sizes, and we offer helpful packages as well as a la carte services. Get in touch with us today to learn more or to get started.

Bookkeepers

Bookkeeping is an important part of tracking the day to day financial transactions of your company, including revenue, purchases, rent, payroll, and more for your business. While many newly minted business owners handle this task themselves, it is also an area where growing businesses find themselves getting into trouble without professional help.

Certifications

Typically, bookkeepers are required to have significantly less education, experience, and financial acumen than accountants, and many bookkeepers rely on their data-driven mind combined with strong math skills and a small number of accounting courses to qualify for their position. However, it’s important to note that bookkeepers are required to do significantly less than an accountant, so this lower level of expertise should not be seen as a negative.

Services Provided

Bookkeepers work primarily in a data recording role for small businesses. While they may be responsible for some internal process beyond reporting, these activities will still be limited to situations where they are tracking data, generating reports, and managing timetables and deadlines, as opposed to analyzing data and making consultative recommendations.

The typical kinds of services that a small business owner can employ a bookkeeper for include:

The recording of financial transactions.

  • Posting debits and credits.

  • Producing and verifying invoices.

  • Maintaining and balancing:

    • Subsidiaries

    • General ledgers

    • Accounts payable (AP)

    • Accounts receivable (AR)

    • Historical accounts

  • Completing payroll

Accountants

Accountants work in roles that are just as data-driven and detail-oriented as bookkeepers, but they provide significantly more expertise and a much wider array of services for a small business. Additionally, accountants can be non-certified, or certified (CPAs). This distinction is ultimately made upon whether or not an accountant has completed the Uniform CPA Exam, but generally indicates a higher level of education, training, experience, and ability.

Certifications

Although qualifications for accountants and CPAs can vary from state to state, and even county to county within a state, accountants generally have a four-year degree, and CPAs generally have a Master’s in Accountancy and have universally passed the Uniform CPA Exam.

Services Provided

An accountant ultimately provides services that are more subjective and critical thinking-oriented than a bookkeeper — whose role is largely based in the recording and verification or transactions — and can help to provide a more consultative voice for a business owner in regards to financial planning, especially in the case of a CPA.

Typical services provided by an accountant to their small business clients include:

  • Preparing and adjusting entries into ledgers upon review

  • Preparing financial statements for business purposes such as loans

  • Completing income tax returns

  • Providing financial analysis and strategies to improve revenue and performance

  • Tax strategy and tax planning

  • Financial forecasting

In the case of CPAs, services may also include:

  • Tax preparation for your business

  • Document preparation for the SEC and IRS

  • Expert witness services for IRS resolutions

Get Everything You Need From Innovative Accounting

Whether you need bookkeeping or accounting help for your small business, Innovative Accounting can help with professional services that are available nationwide. Contact us today to get started.