Bookkeeping and accounting are both great career paths for people who are interested in working with math and numbers. Bookkeepers and accountants both provide financial support and often work together. This said, there are a few key differences between accounting and bookkeeping that anyone pursuing a career in finance should know about. In this article, we explain the key differences and similarities between accountants and bookkeepers along with some of the benefits of each job.
Related: Learn About Being an Accountant
What is the difference between a bookkeeper and an accountant?
Bookkeepers record and organize financial data while accountants analyze, interpret and summarize financial information. They often work together on the same set of data, with bookkeepers gathering the most relevant data and working to make that information accessible to accountants. An accountant might consult with a bookkeeper to clarify financial records or gain additional insight into daily expenses. They share the same goal of supporting a business or individual's financial health through accurate and well-organized information, but they usually work with different steps in the financial management process.
Duties of bookkeeping vs. accounting
Bookkeepers and accountants work with different elements of finance, so although they work closely together their duties are different. Bookkeeping involves recording financial transactions, managing business accounts and maintaining accounting systems. Accounting, on the other hand, focuses on analyzing those financial records and giving advice based on patterns they notice and a client's financial goals.
While some accountants may perform clerical and administrative tasks as a small part of their daily duties, bookkeepers devote most of their time to recording and organizing day-to-day transactions. The daily duties of a bookkeeper include:
- Updating the general ledger
- Recording all payments and income
- Verifying that financial records meet federal documentation requirements
- Managing payroll accounts and processing paychecks
- Organizing receipts, invoices and reimbursement requests
- Producing regular budget reports
- Calculating basic tax deductions
Accountants, on the other hand, use high-level analysis to give advice and create financial models based on different situations. Accountants look at the different variables that influence financial success and place them within the context of financial rules and laws. Bookkeepers focus on making consistent transactions, while accountants form strategies based on those transactions. Other functions of an accountant include:
- Creating financial statements
- Analyzing expenses and suggesting places to save money
- Filing tax returns
- Forecasting the outcome of different financial decisions
- Maintaining knowledge of tax law and procedures
- Business consulting
- Ensuring company compliance with tax law
- Financial management advice
Specializing as a bookkeeper vs. an accountant
Another difference between bookkeepers and accountants is that accountants often specialize within the field of accounting. Bookkeeping has similar procedures regardless of industry or type of business, but some accountants focus their efforts on a particular type of accounting where they hone their analysis based on the technical knowledge of different fields. Different types of accountants include:
- Forensic accountants
- Investment accountants
- Staff accountants
- Project accountants
- Government accountants
- Cost accountants
- Management accountants
An accountant's specialization has a large impact on their daily duties, while the job description of a bookkeeper is fairly static regardless of the situation. For example, a forensic accountant might spend time investigating fraud, while a staff accountant would spend more time doing clerical work and giving tax advice.
Bookkeeper vs. accountant qualifications
Since accountants give financial advice, they need to have more advanced qualifications than bookkeepers whose responsibilities are mostly clerical. While not all accountants have a degree, most employers require at least a bachelor's degree in accounting or another financial field. Accountants can also take the Uniform Certified Public Accountant Exam to become a CPA, a top qualification that indicates a rigorous background in accounting.
Most bookkeeping positions do not have specific formal education requirements and instead prioritize past clerical work experience. Bookkeepers usually have a high level of oversight and work directly with a business owner or accountant to ensure that they manage funds responsibly. Because of this, anyone with keen attention to detail and a high level of accuracy can find work as a bookkeeper. Bookkeeping courses and college experience can make you a more competitive candidate and qualify you to work with larger accounts and companies.
Bookkeeper vs. accountant skills
Accountants and bookkeepers share many of the same skills although they apply them in different ways. Some of the skills that accountants and bookkeepers both use include:
Accountants and bookkeepers both do a lot of writing as they gather and process financial information in a way that other people can easily access and understand. Clear written communication skills are essential for accurate bookkeeping and successful accounting.
Attention to detail
Since bookkeepers and accountants both work with other people's financial information, attention to detail is an essential skill for both positions. Accountants should be able to notice how small details influence someone's overall financial health and bookkeepers need to keep meticulous accurate records for all financial transactions.
Accountants and bookkeepers both perform basic math operations every day and may also be required to do more advanced calculations when working with taxes and investments.
Bookkeepers and accountants need to be highly organized in every aspect of their jobs to be able to easily and quickly access financial records.
Many people and businesses use spreadsheets and computer software for their general ledger, so bookkeepers must have the computer skills to use different types of record-keeping interfaces. Accountants also need computer literacy to access and analyze that data.
Bookkeepers use problem-solving skills to correct any discrepancies between accounts and navigate complex clerical or bureaucratic systems. Accountants apply their problem-solving skills to the unique financial needs and goals of their employers or clients.
Bookkeeper vs. accountant work environments
Bookkeepers and accountants have a similar work environment, as they both usually work independently in an office environment. Although they work as individuals, they often collaborate with other positions to improve communication and create an efficient workflow. Accountants and bookkeepers usually work full time and often have opportunities to earn overtime pay during busy times, such as tax season.