Understanding the difference between bookkeeping and accounting is empowering as a business owner, but it’s also important to understand the kinds of credentials accountants and bookkeepers have in order to determine how or when to use each. Read on for a look at what the roles of bookkeeper and accountant entail.
Role of A Bookkeeper
Bookkeeping is the process of recording daily transactions in a consistent way, and is a key component to building a financially successful business.
Bookkeeping is comprised of:
- Recording financial transactions
- Posting debits and credits
- Producing invoices
- Maintaining and balancing subsidiaries, general ledgers, and historical accounts
- Maintaining a General Ledger
- Completing payroll
- $50 per hour
Role of An Accountant
Accounting is a high-level process that uses financial information compiled by a bookkeeper or business owner and produces financial models using that information.The process of accounting is more subjective than bookkeeping, which is largely transactional.
Accounting is comprised of:
- Preparing adjusting entries (recording expenses that have occurred but aren’t yet recorded in the bookkeeping process)
- Preparing company financial statements
- Analyzing costs of operations
- Completing income tax returns
- Aiding the business owner in understanding the impact of financial decisions and tax planning
$80-100 per hour
The Bottom Line
Organized financial records and properly balanced finances produced by the bookkeeper, coupled with smart financial strategy and accurate tax filing by the accountant, contribute directly to the long-term success of every business. Some business owners learn to manage their finances on their own, while others opt to hire a professional so that they can focus on the parts of their business that they really love. Whichever option you choose, investing—whether it be time or money—into your business financials will only help your business grow.
Over 30 Years Experience