What’s The Difference Between Accounting and Bookkeeping
There comes a time when you either want to organize your money or have someone do it for you. Learning how to handle money in business or in your life is often difficult. We’re all not math geniuses. Trying to understand how to arrange your financials is tricky. Here are some things to comprehend when getting familiar with accounting vs bookkeeping.
The Definition
Most businesses use a bookkeeper to keep track of the day-to-day financial transactions throughout the company. They handle payroll, bonuses, distributing checks, and creating balance ledgers. They can either work in the office or at home. Most use some kind of bookkeeping software to keep the business on track and organized. They can run reports and print out charts. As for accounting, it provides the knowledge of what bookkeeping numbers mean. The financial charts are subjective. They tell owners about business costs and taxes. Many owners hire accounting firms to handle all of their data. A trained and educated CPA helps to make sure a business stays compliant with its taxes. Accounting firms help companies cut costs, save taxes, or run audits.
Training
A bookkeeper doesn’t need certification to work at a company. However, if they decide to get an AIPB (American Institute of Professional Bookkeepers) certificate, they’ll need two years of experience and must take the national exam. To keep their certification, they must continue their education. One can still become a bookkeeper as long as you pass exams in subjects like payroll, business accounting, bookkeeping, and small business financial management. With technology picking up so fast, learning bookkeeping at home is another opportunity to start a new career without going to school for years. Today, there are various software programs that run reports, invoices, balance ledgers, or payroll. Several small businesses hire one person to handle their in-office bookkeeping. The salary is hourly or annually, depending on the size of the company.
Accountants go through more intense education. After all, high-level firms hire them to save them from tax debt, offer financial decisions to move the business forward, and monitor the entire company’s financial health. Accountants give owners a big picture of their business. A basic accountant degree isn’t the same as having a CPA. (Certified Public Accountant). A CPA is educated and familiar with tax codes in all states. It’s a large portion of their accounting degree. They can also represent you in court if ever sued. An Accountant can have either a license, years of experience, or certification. Many companies have different qualifications when hiring their accountants. Some might what a bookkeeper to be their accountant to take on both roles.
Tips when hiring
It’s always good to know the difference between a bookkeeper and an accountant. For one, you might have an expectation of your bookkeeper that isn’t trained to do a CPA’s job. Take the time to educate yourself about the roles you want your bookkeeper or accountant to take on. If you’re on a tight budget, then at least make sure whoever you hire attempts to continue their education. This way they stay up with the recent changes in the bookkeeping or accounting field. Your a new hire should have at least completed a class, have a certificate, a two-year degree, or years of experience. Many businesses are more comfortable with bookkeepers or accountants that have over five years of work in their industry.
These are a few tips to help you understand the difference between bookkeeping and an accountant. Research the exact definitions so you know how to separate the two when you hire. A bookkeeper handles payroll, but can’t represent you in court. They keep your business organized by helping control all financial transactions. Bookkeepers run reports, but it’s the accountant who will analyze them. Understand which certificates or degrees are important for your bookkeeper or accountant to have on their resumes. Before hiring, decide if you want a bookkeeper who can do accounting work or the other way around. Take the time to write out their intended roles. CPA’s train to know the tax codes inside and out. Bookkeepers and accountants are valuable to every company. Practice good hiring skills by taking the time to know the difference.
