One of these things is not like the other
Q: What’s the difference between a bookkeeper and an accountant?
ACE advises: People often use “bookkeeper” and “accountant” to mean roughly the same thing. Both are people who deal with company finances. But, for businesses and nonprofits, the differences are significant. Whether you need to fill one or both roles depends on which tasks you need performed.
You need a bookkeeper if: The job is literally to keep the books, recording all the money flowing into and out of the organization. Among other tasks, they:
- Identify and record every financial transaction
- Post debits and credits
- Produce invoices
- Maintain and balance accounts
- Complete payroll
These days, most organizations use specialized bookkeeping software to maintain the general ledger (the document where receipts from transactions are posted), but you may well need a professional to ensure the software is used correctly. Bookkeepers should have specific training, but a bachelor’s degree is not a requirement.
You need an accountant if: The need is for a higher-level process than bookkeeping that requires highly specialized training and continuing education to stay abreast of changing requirements. Among other common tasks, accountants:
- Summarize, interpret and communicate financial transactions
- Prepare financial statements
- Analyze operational costs
- Complete income tax returns
- Offers opinions on financial strategy to leadership
Accountants may specialize in tax preparation, auditing, or other areas, and they typically have a bachelor’s degree in accounting or another finance-related field. Some have advanced degrees or certifications, including Certified Public Accountants (CPAs), which signify professional experience and expertise.
Dean Michaud is president of Michaud Accounting Solutions, at www.michaudaccountingsolutions.com.
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