Although the terms bookkeeper and accountant are used interchangeably, they are two distinct professions. The main difference between a bookkeeper and accountant is that bookkeepers generates data, while accountants turns that data into information. Bookkeeping is only one part of the accounting process, making accountants a level up from bookkeepers. Bookkeepers and accountants often work in tandem in an office environment, and many people who start out as bookkeepers go on to become accountants. Explore the differences between becoming a bookkeeper vs. accountant to determine which career path aligns with your interests and goals.
Key Differences Between Bookkeepers and Accountants
1.) Education Level
In order to become a bookkeeper, you need at least a high school diploma. Some employers may prefer hiring bookkeepers with postsecondary education, such as a bookkeeping certificate or an associate’s degree in accounting.
Most accounting jobs require candidates to have at least a bachelor’s degree in accounting, although some employers prefer hiring candidates who have a master’s degree in the field. CPA candidates are required to complete 150 hours of college coursework, which is 30 hours more than the usual four-year bachelor’s degree.
2.) Job Responsibilities
What Bookkeepers Do
Bookkeeping is a discipline that is designed to generate data about an organization’s activities. Bookkeepers work for companies to keep the financial books, typically using bookkeeping software like QuickBooks. They are tasked with recording day-to-day financial transactions, such as accounts payable, accounts receivable, inventory, and payroll. Bookkeepers may provide reports on a monthly, quarterly or annual basis. They may also update statements and check financial records for accuracy.
What Accountants Do
Accountants are typically responsible for examining financial records, preparing financial reports, performing audits of the books of public companies, and assessing financial operations. Accountants are also required to explain their findings and suggest ways to reduce expenses, enhance revenues, and boost profits.
A Certified Public Accountant (CPA) has additional credibility and expertise. CPAs have passed an exam and met licensing requirements in their state. In addition to preparing and reviewing financial statements, CPAs are qualified to prepare and sign tax returns for individuals and businesses, as well as represent taxpayers before the IRS.
3.) Salary and Employment Outlook
According to the Bureau of Labor Statistics, the employment of bookkeepers is expected to grow by 11% from 2012 to 2022, while accounting positions should grow at a rate of 13%, which are both about as fast as average for all occupations. The increase in these positions will reflect the growth of the overall economy. Additionally, stricter financial regulations and the continued globalization of businesses will contribute to employment opportunities. In 2012, bookkeepers earned a median annual wage of $35,170, and accountants earned $63,550.
Deciding Between a Bookkeeper or Accounting Career
So, what is the difference between bookkeeping and accounting? Bookkeepers record day-to-day financial transactions, while accountants make sense of the information and look at the big picture. If you enjoy working with numbers, a career as a bookkeeper or accountant may be right for you.
Becoming a bookkeeper is ideal if you want to take a quicker path to employment. As a bookkeeper, you could work towards your accounting degree and become an accountant if you decide that it’s the right path for you. If you would like to play a more active role in an organization’s financial operations and provide best-practice recommendations to managers and clients, becoming an accountant is probably a better choice. After examining the differences between bookkeepers vs. accountants, it will be possible to determine which career is the best fit.