Are you thinking of hiring someone to help with your books of accounts? You may be wondering whether to hire a bookkeeper or an accountant. While the roles of the two may be similar, there are a few significant differences that may influence your decision.
Bookkeeping involves keeping a direct record of all transactions made by the business. However, each account subjects these records to a subjective look to determine what the information means for the business. An accountant can also work as a bookkeeper. However, a bookkeeper cannot be considered an account without the proper certification.
Typical Bookkeeping Tasks
As explained earlier, a bookkeeper keeps a record of all the money that is coming in and going out of the business. The typical tasks include the following:
• Managing the payroll
• Posting credits and debits in the cash book
• Maintaining ledgers, subsidiaries, and accounts
Bookkeepers do not need to be certified to handle books of accounts. However, licensing is available from the National Association of Certified Public Bookkeepers (NACPB) and the American Institute of Professional Bookkeepers (AIPB).
Accountant Tasks
An accountant uses the information recorded by a bookkeeper for his analysis. Some typical tasks include the following:
• Verifying the data and analyzing it for forecasts, growth opportunities, and business trends.
• Generating financial reports, such as balance sheets, tax returns, and income statements, as well as performing audits.
• Determining the impact of business decisions
The qualifications for an accountant vary according to their certifications and experience. They usually have a bachelor’s degree in the financial field. Some of the accounting certifications that they can choose from include certified public accountant, certified internal auditor, and chartered financial analyst.
Businesses that are starting or those that are small can work with bookkeepers and outsource the services of accountants when a need arises. However, as the business grows, you may need an internal accountant for financial data analysis and the creation of detailed reports.
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