Did you know that the Bureau of Labor Statistics (BLS) estimates about 172,200 job openings for bookkeepers, accountants, and auditing clerks every year for the next decade?
If you are good with numbers becoming a bookkeeper or accountant may be the right career for you. Or, if you are an entrepreneur, you may be needing to hire a bookkeeper or someone for accounting services.
But what is the difference between bookkeeping and accounting? Keep reading on to find out.
What Does a Bookkeeper Do?
The primary task that bookkeepers are responsible for is maintaining a general ledger. A ledger is a document that shows the history of the sales and expenses.
Other tasks that bookkeepers are responsible for include:
- Keeping records of financial transactions
- Posting debits and credits
- Making invoices
- Managing payroll
- Balancing accounts, ledgers, and subsidiaries
Many bookkeepers choose to work as freelancer bookkeepers. Thus, they can work for themselves and set their schedules. In addition, bookkeepers can get bookkeeping clients on their own.
What Does an Accountant Do?
An accountant is responsible for analyzing the financial data. Often, this financial data is documented by a bookkeeper.
Some other responsibilities of accountants include:
- Generating reports and audits
- Preparing report records (i.e., tax returns, income statements)
- Provide information on opportunities to grow and business trends
An accountant assists the client in understanding the big picture of their financial decisions. For example, they help business owners understand how choosing a financial business decision could impact them and their business.
Credentials for Bookkeepers
The most significant difference between the two is the level of education and certifications. Bookkeeping does not need any formal education or certification. However, there are licensing options to help them win some clients.
The AIPB (American Institute of Professional Bookkeepers) certification requires bookkeepers first to have at least 2 years of full-time work experience. In addition, bookkeepers wishing to get certified through the AIPB must pass a national bookkeeping exam.
Bookkeepers must complete continuing education to maintain their AIPB certification.
Some bookkeepers get licenses through the National Association of Certified Public Bookkeepers (NACPB). Even if a bookkeeper decides against licensing they still need to know financial terminology.
Credentials for Accountants
Accountants have a variety of different qualification levels. These different levels are based on their experience, licenses, and certifications.
For example, a CPA is a type of accountant with advanced skills. A CPA is required to meet several state requirements. In addition, a CPA must pass the Uniform CPA exam. They must also complete continuing education requirements.
However, all accountants must earn a bachelor’s degree.
Knowing the Difference Between Bookkeeping and Accounting
While there is a difference between bookkeeping and accounting, their jobs intertwine many times.
An accountant can give financial advice. They can also assist you in making the best financial decisions for you or your business. However, bookkeepers keep detailed and organized records of your finances.
If you enjoyed learning about bookkeeping vs accounting, you can read more articles. Just go under the finance section of this blog today.