El Triunfo

Accounting and bookkeeping are the same, right? Not so fast. If you’ve ever wondered about the difference between the two, you’re not alone. While they’re often lumped together, they both have their own distinct characteristics and require their own unique skills. So, let’s dive in and uncover the similarities and differences between accountants and bookkeepers, bust some common misconceptions, and find out when you need one over the other.

Sharing common ground 

Both accountants and bookkeepers play an important role in managing the financial health of your business. They ensure that your financial records are current and accurate, and they also make sure that you’re complying with relevant regulations. 

Here’s where they overlap: 

• Record keeping: Both accountants and bookkeepers maintain financial records, but the depth and complexity can vary. 

• Accuracy: They both have a keen eye for detail and ensure financial data is accurate. 

• Compliance: They help your business remain compliant with tax laws and regulations. 

• Financial health: Both provide insights into your financial well-being, but the specifics may differ (i.e., bookkeepers provide short-term insight, while accountants provide long-term forecasting and strategy). 

Acknowledging key differences 

While the roles of accountant and bookkeeper have some similarities, they also have larger differences to consider. 

Bookkeepers… 

• Handle the day-to-day task of recording financial transactions, like payments, sales, receipts and purchases; generate invoices, post debits and credits; and maintain and balance ledgers and accounts. 

• Don’t require a license, but they must have a solid understanding of accounting principles. They can choose to obtain a certification or license, but it’s not required. 

Accountants… 

• Analyze financial data, prepare reports and offer strategic advice, and provide services such as tax preparation, financial planning, auditing and consulting. 

• Require a bachelor’s degree in accounting or a related field, and often need a CPA (Certified Public Accountant) license. 

Busting common misconceptions 

Let’s clear up a bit of confusion surrounding the roles of accounting and bookkeeping.

1. “They’re basically the same thing.” Nope. They have distinct roles and skill sets; one requires a degree and/or CPA license, and the other requires knowledge of accounting principles. 

2. “Bookkeepers are junior accountants.” Also, not true. They’re separate professions with their own specialties. 

3. “You only need one or the other.” In reality, many businesses, especially larger businesses, benefit from having both an accountant and a bookkeeper. 

4. “Accountants just do bookkeeping.” Again, no. While accountants can keep books, it isn’t their primary focus.  

When to hire a bookkeeper vs. an accountant 

So, when do you call in a bookkeeper, and when is it time to bring in an accountant? 

You need a bookkeeper when: 

• You’re drowning in daily financial transactions and can’t manage them alone. 

• Your receipts are taking over your desk (and your life). 

• You need someone to manage payroll, expenses and invoicing. 

• You want to ensure your financial records are—and stay—current and accurate. 

It’s time for an accountant when: 

• It’s about to be tax season, and you’re lost. 

• You need financial statements and reports that make sense. 

• You’re looking for ways to grow your business financially. 

• You need strategic financial advice or planning. 

Many small businesses start with a bookkeeper and bring in an accountant as they grow. 

The more you know…

Even though accountants and bookkeepers play a crucial role in keeping your finances in check, they each bring their own unique skills and experience to the table. Bookkeepers take care of the daily financials, and accountants help advise you on your finances and business. Not sure which one you need? We can help.