Bookkeeping vs Accounting: What’s the Difference?
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If your business already has a bookkeeper, but you begin to struggle with legal financial questions, it might be time to hire an accountant. But if you work in a very tax-specific area, you might think of hiring both professionals for accounting and bookkeeping needs. Accountants and bookkeepers both can offer valuable insight into your business’s financial situation, helping you make better decisions around cash flow and stay prepared when it comes to tax liabilities.
Students planning to pursue certifications other than the CPA exam should also contact the respective certifying organization to confirm requirements for certification prior to enrolling in any accounting program. One of the most attractive aspects of bookkeeping and accounting careers is that companies in almost every industry rely on specialists in these fields. Enterprises and medium-size companies often have in-house accountants and bookkeepers.
What Is the Difference Between a Bookkeeper & Accounting Clerk?
Let us know what type of degree you’re looking into, and we’ll find a list of the best programs to get you there. Learn from our students and alumni who pursued their educational goals at University of Phoenix while balancing school, work and life. And while it may not be the most glamorous topic, bookkeeping also plays a part. Outside of universities, certifications are available through the American Institute of Professional Bookkeepers (AIPB) and the National Association of Certified Public Bookkeepers (NACPB). Discussed options for my business with Brian and he was very helpful in suggesting how best to handle it.
In-house accounting, on the other hand, gives you peace of mind knowing that someone you know and trust is handling your books and financials. The only drawback of paying a full-time accountant is that you may need to offer them employee benefits. Outsourcing accounting services allows you to reap the benefits of an accountant without the costs of a full-time employee, such as insurance and other benefits. There are two main types of bookkeeping to be aware of when deciding what type of bookkeeper to hire. These include basic and full-service bookkeeping, where the decision largely depends on your business goals and needs. On top of this, it is also a bookkeeper’s job to keep everything organized.
Bottom Line: What’s the Difference?
Bookkeepers don’t need to have the educational background in finance or the certification. However, licensing is available if they want to add a more professional touch to their business. An accountant can be considered a bookkeeper but a bookkeeper isn’t considered an accountant without the proper education and certification. The biggest difference between the two is the educational background, certification, and licenses.
The process of maintaining certification can help you keep your skills sharp over time as well. To renew your certification, you must complete continuing coursework, attend professional development programs and take part in training workshops. While these requirements may sound tedious, they could benefit your career in the long term. Additionally, your employer might be inclined to promote and offer higher salaries to certified bookkeepers. Demonstrating a high level of proficiency can reassure employers that you’re equipped to take on greater responsibility, significantly raising your earning potential. However, a bookkeeper’s salary varies depending on their education, location and level of experience.
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There’s not much room for error when it comes to managing your small business’ money. Let our FinancePal professionals handle it, and refocus your efforts on accelerating your company’s success. In general, accountants must have a bachelor’s degree in accounting or finance to qualify for an accounting role. Accountants may also get professional certifications law firm bookkeeping like a Certified Public Accountant (CPA) for additional credibility and experience. An accountant works closely with the business owner or decision-maker to adjust budgets, file taxes, and strategize for financial success. With the introduction of financial management software for businesses, the lines have blurred between bookkeepers and accountants.
- Accounting software allows you and your team to track and manage your business’s expense reports, invoices, inventory and payroll accurately and efficiently.
- That way, should you need to hire a professional down the line, they will have visibility into the complete financial history of your business.
- A forensic accountant’s job is to investigate, audit, and prove the accuracy of financial documents and dealings.
- In general, accountants must have a bachelor’s degree in accounting or finance to qualify for an accounting role.
- Nonprofits may start doing this by asking for volunteers to cover the responsibilities.
- While some accountants do perform bookkeeping functions, their training allows them to provide additional insights and to be instrumental in planning for future purchases, growth, expansion and more.
- Accountants, on the other hand, tend to use the bookkeeper’s inputs to create financial statements and periodically review and analyze the financial information recorded by bookkeepers.
However, keep in mind that those higher living costs may cancel out the financial benefits of increased bookkeeping salaries. Credentials like the CB and CPB certifications may also help bookkeepers develop the superior skills that boost their overall compensation rates. Industry observers agree that software improvements have made bookkeeping more efficient. As a result, the profession’s growth rates have slowed, but the Strategic Finance article notes growing gaps between the number of open jobs and the number of people qualified to fill them. In 2019, Strategic Finance magazine published a report detailing a “looming crisis” in the accounting industry. The editorial asserted that not enough new bookkeepers are emerging to replace professionals aging into retirement.
Make your accounting career possible with Herzing
While accounting can be a lucrative long-term career, most accountants, unlike corporate attorneys or investment bankers, do not command huge salaries during the first few years. There are various career paths for accountants (and some for bookkeepers), from working as a forensic accountant to becoming a financial auditor or an enrolled agent. Bookkeepers aren’t required to be certified to handle the books for their customers or employer but licensing is available. Both the American Institute of Professional Bookkeepers (AIPB) and the National Association of Certified Public Bookkeepers (NACPB) offer accreditation and licensing to bookkeepers. Bookkeepers record financial transactions, post debits and credits, create invoices, manage payroll and maintain and balance the books.
An accounting degree offers students in-depth knowledge to a range of advance accounting principles and processes. Bookkeepers record financial transactions and maintain accurate financial ledgers. They may also oversee accounts payable and receivable, process payroll, and track financial transactions.
