Bookkeeper vs. Accountant: Which is Better & Why

When it comes to money management, some business owners don’t know where to start. Many business owners begin by taking care of the finances themselves, keeping their own ledgers and filing their own taxes. Soon, however, the business will grow and may become too big to handle the finances internally. This is where bookkeepers and accountants come in. When it comes to choosing between a bookkeeper vs accountant, not everyone knows which to hire. Both have similar knowledge of finance but they play completely different roles.

Job Duties of a Bookkeeper

What is a bookkeeper? This person has a simple and straightforward job: to balance and maintain all financial accounts related to an individual, business or organization. Bookkeepers primarily help others by keeping an organized record of all the day-to-day and month-to-month transactions. If you need someone with an eye for detail who can manage the minutia of your financial information, a bookkeeper is exactly what you’re looking for. By keeping all of your information organized and accounted for, your bookkeeper can prevent you from enduring a CRA audit, help you avoid penalties, manage deductions and save you precious time.

Duties of a Bookkeeper

• Balance and Maintain Subsidiary Accounts

A subsidiary ledger contains all of the information that supports a general ledger control account. Bookkeepers enter and maintain information from areas such as job orders, costing systems and accounts receivable to keep every detail up to date.

• Balance and Maintain General Ledgers

General ledgers hold important information on all accounts and assets. This includes accounts payable, accrued expenses payable, customer deposits, notes payable and more. They also manage the day-to-day balance sheet of things like accounts receivable, cash, equipment and so on. The general ledger, while tedious, is the lifeline that keeps the business accountable for all ingoing and outgoing expenses.

• Preparing Financial Reports

A financial report is the summation of all financial statements and information. It’s a formal account that includes a balance sheet, statement of cash flow, any changes in equity, income statements and more. Skilled bookkeepers are able to create legible reports that are easy for the layman to understand.

• Management Advising

Bookkeepers are expected to analyze past and present financial trends in the company and advise them on certain financial decisions. Their attention to detail allows them insight into the inner workings of the business and can bring important information to light.

When to Hire a Bookkeeper

Businesses often overlook bookkeepers when they need them the most. Budding businesses can make use of a bookkeeper to help jumpstart a log of all of the money coming in and out of the business. Hiring a bookkeeper early can give you a good idea as to where your money is going and what you can do to tie up any loose ends and maximize your profits in the future. They take on the task of organizing all of your financial documentation so that you can focus your attention on your business.

Duties of an Accountant

What is accounting? Accounting covers a wide array of financial matters that an individual can perform. Most employers require accountants to have at least a bachelor’s degree, and more have master’s degrees and advanced certificates. No matter their background, all accountants share an advanced understanding of accounting and financial concepts and can enlist them to make smart financial decisions. Qualified accountants are certified to provide expert advice to direct your company toward financial growth. As big picture thinkers, accountants analyze trending data to forge the path ahead. These are just a few of the things an accountant is equipped to handle:

• Business Development

An experienced accountant has the knowledge needed to help you build your business. They have the ability to give you solid financial input and predict the essential capital you need to make your business successful. Some accountants may specialize in your sector and can give you industry-specific advice.

• Taxes

Accountants undergo years of schooling to gain in-depth knowledge of tax law and regulation. Even a basic accountant should have the skill to organize your tax documents, account for any errors, optimize deductions and foresee any taxable pitfalls that can put you or your business in danger. When tax season comes around an accountant will be there to guide you in the right direction.

• Financial Analysis and Advice

Qualified accountants are permitted to analyze your finances and advise you on decisions you should or shouldn’t make for your financial success. A good accountant has a keen eye to measure details and determine how small patterns can make a big impact on businesses and organizations. They can also exploit any possibilities for financial growth.

• Certified Public Accounting

Chartered accountants have more authority to prepare certain documents than their uncertified peers. CPAs are permitted to prepare three types of financial statements: audited, reviewed and compiled. Large public companies need CPAs to prepare important financial documents like audits.

Traits of a Skilled Accountant

Contrary to what you might believe, accountants aren’t stuck in a cubicle all day crunching numbers. Accountants are dynamic and communicative individuals that must be able to work in a variety of settings. Effective accountants are able to convey information and ideas to both their department and other department heads. As financial advisors, they must be able to communicate information and advice to individuals with little to no knowledge of finance. Accountants are dependable individuals who systematically examine information to draw the best and most logical financial conclusions. They have the responsibility to hold the business to ethical financial standards and provide legal advice.

When to Hire an Accountant

Accountants aren’t reserved for big businesses. Small businesses can now outsource their accounting needs to other firms or even freelancers. Accountants are qualified to write business plans and provide legal advice to keep your business on the right track. What is the difference between bookkeeping vs accounting? While bookkeepers organize data, accountants turn the data into valuable information.

Education

Bookkeepers and accountants have similar educational backgrounds. Both professions start by learning the basic principles of accounting and its applications. The responsibilities of a bookkeeper overlap with the tasks of a basic accountant in some ways, but their educational background limits their authority. Accountants usually earn higher degrees and command higher salaries as a result.

Bookkeepers

Bookkeepers need at least a high school diploma to embark on their career. While many bookkeepers don’t have college degrees, employers do seek candidates with higher education. The most common educational background for bookkeepers includes an associate’s degree and certification. Employers typically require one or both of these if the candidate doesn’t have any other formal education. To gain an associate’s degree and certification bookkeepers usually go through a one or two year program dedicated to the craft. During this time candidates learn the ins and outs of common data programs and bookkeeping methods they can use on the job. Bookkeepers who pursue further education are expected to obtain a minimum 2-year degree in accounting.

• Bookkeeping Certificate

The certification program for bookkeeping usually takes no more than a year to complete. During this time students learn basic accounting principles, business math, bookkeeping software, digital bookkeeping, business tax, non-profit financial management and more.

• Associate’s Degree in Accounting

An associate’s degree program in accounting is more intensive than a bookkeeping certification. A bookkeeper with an associate’s degree studies more advanced topics to cover a breadth of topics. A 2-year crash course in accounting will include statistics, economics, auditing, non-profit accounting, managerial accounting, financial accounting and more. They’re often equipped with knowledge of finance, business law, accounting principles and more. In many ways, they are qualified basic accountants.

Accountants

If a bookkeeper can become an accountant then what’s the point of hiring an accountant? Accountants don’t need a full degree to practice, but employers who are looking for accountants will expect a different set of skills and knowledge.

• Bachelor’s Degree

Some employers hire accountants with an associate’s degree, but an accountant who wants more mobility in the workplace will earn at least a bachelor’s degree. Accountants often pursue a bachelor’s in accounting, economics, mathematics and even computer science. To be a fully accredited accountant, most states require the completion of at least 150 credit hours.

• Master’s Degree

Today many accountants pursue master’s degrees. With a master’s, accountants have the intent to specialize in a particular field or sector that they hope to work in once they graduate. Some even diversify and earn an MBA.  Accountants with either a bachelor’s or master’s degree have the privilege to perform bookkeeping tasks and hold some managerial positions. Those who earn a master’s usually have the intent of becoming CPAs.

• Certified Public Accountants

Certified Public Accountants, or CPAs, have the highest prestige of anyone in the accounting field. To become a CPA, candidates must undergo thousands of hours of rigorous studying to pass a year-long exam. The exam is broken into several parts that the candidate must pass within a certain time frame, or else he or she needs to start over. Even highly educated accountants may take a few years to pass the exam, and it’s common for first-timers to fail on their first try. Those who become CPAs have the highest authority to provide accounting management, financial supervision, business finance guidance and even the unlimited authority to represent tax payers before the IRS.

Hiring a Professional vs Using Accounting Software

The growing question in the accounting industry is whether or not developing software will replace accountants. While software like Quickbooks and Xero are good for budgeting, organization and instant access, it lacks a personal touch that only a good accountant can provide. Accountants don’t just log your information but they also give you insightful financial and legal advice. They’re able to use their knowledge to help your business grow. If you want to save time and dedicate yourself to other aspects of your business an accountant will take on that responsibility for you.

Should I Hire Both a Bookkeeper and an Accountant?

In some cases, you might need both. While the skillset of bookkeepers and accountants overlaps their primary functions are different, so they can both offer insight into your business in different ways. Accountants are equipped to understand the big picture of your financial situation and give you quality advice. They can procure business plans, key documents, audits and more to point your business in the right direction. During tax season, an accountant will manage all of your tax documentation for you and handle specific advice to help you make the right decisions and avoid trouble with the IRS. A bookkeeper, on the other hand, spends a few hours each week sorting all of your financial information. When you hire a bookkeeper, you know you’ll get consistent weekly updates on the most basic of tasks like payroll, expenditures and organizing important documents like receipts and transactions. When you hire a reliable bookkeeper you don’t have to worry about the minutia of day to day spending and you know that checks will always be sent out on time.

Hire Accounting and Bookkeeping Services from Community Tax

Community Tax provides custom accounting services tailored to your needs. Our team of CPAs, bookkeepers and accountants are ready to assist you with your needs. Our professionals have worked with clients in numerous industries and in businesses both big and small. We are proud to provide our accounting and bookkeeping services to clients in need so that they can focus on other aspects of their business. The bookkeepers at Community Tax will oversee any transactions and disbursements, while our accountants will manage tax returns, journal entries, reports and tax preparation services. We have a long standing history of helping others outsource their accounting and bookkeeping needs, ensuring they keep their business running smoothly. Our devoted team of professionals is committed to bringing you top notch services in your financial matters so you can focus on other aspects of your business. Let us prepare your taxes, fill out audits, manage transactions and so much more.

Accounting and Bookkeeping Services from Community Tax

At Community Tax, we’re proud to represent thousands of clients in a variety of industries to help them meet their goals. We outsource our accounting and bookkeeping services to individuals, business and organizations alike. Our team of accounting professionals have a proven history of collaborating with satisfied clients to help them reach their financial goals. Whether you need someone to organize your financial records from day to day or you need expert financial advice for you future, Community Tax is here to work with you. Here are just a few of the services we offer to set you on the right track for success:

• Account Reports
• Adjusting Journal Entries
• Annual Payroll Tax Returns
• Quarterly Tax Returns
• W-2 and 1099 Misc Prep
• Customized Financial Reporting
• Sales and Use Returns
• 940/941 Filings and Amendments
• State and Local Payroll Filings
• EOY 1099s
• EOY W-2’s
• Poster Compliance Update Service
• Application for Agency ID’s SUI and SIT
• Individual and Corporate Tax Returns
• Tax Resolutions
• Audits

We pride ourselves on providing quick and thorough data entry and information to help your business grow. Small business and large companies alike have benefited from outsourcing their accounting and bookkeeping needs at Community Tax. Reach out to us now and our professionals will consult with you on how we can tailor our services to your needs.

Our Services Are Tailored to You

Every individual, business and organization needs specific services that suit their needs. We want to help you grow the finances of your business at a price you can afford. With us you don’t need to worry about hidden fees and surprises. Our experienced accounting team makes the process simple with flat-rate packages and a la carte services. The process is simple. If you choose to try our services you can use us free for your first month, no questions asked. We’ll pair you with a dedicated team who’ll learn the ins and outs of your business and financial goals to forge the path ahead. Your team will connect to your accounts, organize and manage all of your bookkeeping needs, and keep an eye on details. We’ll take on the heavy work and stay in contact with you every step of the way so you can focus on other important business priorities. Packages and A La Carte Services Choose between our affordably priced services, designed with your budget in mind. Packages

• Bronze

At $99 per month, we provide monthly bookkeeping 24/7 IRS correspondence monitoring, Bank Reconciliation and Financial Reporting and estimated tax payment analysis. This package is best for small businesses.

• Silver

The silver package includes everything in the bronze package plus two bank accounts, two credit cards and unlimited CPA tax planning at just $199 a month. Medium-sized businesses will benefit most.

• Gold

The motherlode has everything the silver package provides plus payroll processing and a single dedicated IRS tax attorney. Large organizations and businesses can put these services to good use. Call us today for pricing. A La Carte Services Do you only need a few specific services? With Community Tax, you’re able to cherry-pick what you need to get the results you want. Choose from any number of these services and call us for pricing.

• Customized Financial Reporting
• Sales and Use Returns
• 940/941 Filings and Amendments
• State and Local Payroll Filings
• EOY 1099s
• EOY W-2’s
• Poster Compliance Update Service
• Application for Agency ID’s SUI and SIT.

Bookkeepers and accountants are essential for any business. No matter your goals or business size, both can help you manage your finances in different ways. Contact us today and we’ll tell you more about what we can do for you and your business.