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#Distinction between bookkeeping and accounting professional#

The main duties of a bookkeeper are to record all of the transactions that occur throughout a business and to classify those transactions into specific accounts, called the chart of accounts. There is also a Uniform Certified Public Accountant exam that all CPA candidates must pass before they can call themselves a Certified Public Accountant.Īll of these factors are part of the reason that the cost of an accountant is higher than that of a bookkeeper. In order to become a CPA, one must obtain sufficient experience as well as meet certain continuing education requirements. The most common certification is the CPA designation, or Certified Public Accountant title.

#Distinction between bookkeeping and accounting professional#

The requirements needed to call yourself an accountant are much more strict than those needed to call yourself a bookkeeper.įirst of all, you will generally need a bachelor’s degree in accounting or the closely related field of finance as a bare minimum requirement to become an accountant.įurther, there are other professional certifications that one can receive to further their accounting career. Without knowing your level of debt compared to your assets, your income over a certain period of time, or the amount of cash you have on hand, it is extremely difficult to gauge the financial health and performance of your company.Īn accountant can turn the information collected from the bookkeeper into insightful reports that allow you to better understand the financial state of your organization.īookkeepers and accountants may have some overlapping responsibilities but require different levels of expertise, training, and certifications. One of the most important responsibilities of the accountant is to analyze the financial statements and communicate the findings to those in charge of the organization.Īnalyzing financials is a vital part of understanding the performance of your business.

Conduct tax planning, provide tax advice, and prepare tax returns.

Responsibilities of the the accountant include: While it is the bookkeeper's job to record, organize, and compile financial data, it is the job of the account to analyze and communicate that financial data to owners and management. However, certain business transactions require supporting documents which can be found on the IRS website. How often these tasks are carried out by the bookkeeper will depend mostly on the size of your business and the number of transactions that occur on a daily basis.Īll income and expenses need to be recorded in order to ensure that the financial information used to measure the success of your business is useful and correct.

Generating financial statements ( balance sheet, income statement, cash flow statement).

Reconciling bank accounts on a monthly basis.

Manage accounts payable and accounts receivable.

In other words, it is the responsibility of the bookkeeper to record the daily transactions of a business in a consistent manner for easy interpretation by the accountant.

The main goal of a bookkeeper is to keep a record of all of the money coming in, and going out, of a business.

With that said, there are many other tasks that the bookkeeper and accountant are responsible for which will be discussed in detail below. As stated above, bookkeeping is mainly about recording financial information as transactions occur in your business while accounting deals more with interpreting financial information at the end of an accounting period.