The Difference Between a Bookkeeper and Accountant

Let’s say that you’ve already got an accountant. You may wonder why you would also need a bookkeeper. Don’t they do the same thing? Isn’t an accountant an upgraded version of a bookkeeper?

In a word, no. Bookkeepers and accountants, while they both work with your books and finances, perform very different tasks. Read on below to find out why, even though you’ve already got an accountant, you still need a bookkeeper!

What an Accountant Does

While the specific job an accountant does depends on exactly what kind of accountant they are and what you’ve hired them for (tax accountant, CPA, etc.), accountants are basically responsible for analyzing and interpreting financial data. Think of an accountant like a doctor performing a diagnosis. He or she would analyze your books and provide you with information about what is happening in your firm based on the way money flows through it.

What a Bookkeeper Does

Bookkeepers are much more hands-on. While accountants analyze and interpret, bookkeepers classify and organize. Bookkeepers are the people who create the books that accountants later rely upon to make their “diagnoses.” So, for example, while an accountant may tell you that your persistently high accounts receivable balance suggests you may have to write off some bad debts, your bookkeeper would be the one who classifies and organizes your receipts into accounts receivable in the first place.

Why You Need Both

The preceding is a horrendously oversimplified description of the vital roles filled by both accountants and bookkeepers. The point we’re trying to make, though, is that they are different and distinct jobs. While some accountants may be willing to perform some of the tasks usually completed by bookkeepers, and vice versa, it is essential for a firm to ensure that the tasks are being completed by someone competent in the field.

When you need to analyze the financial strength of your firm, prepare your taxes, or interpret the meaning of persistent patterns in your books, an accountant is likely to be very useful. When it comes to day-to-day tasks however, a bookkeeper is likely to be even more valuable. Bookkeepers organize and classify transactions in a way that prevents your books from falling into disrepair and chaos. Their efforts allow you to keep an eye on your books in real-time, as they organize your income and expenses. The best of them can even provide some interpretation of the patterns that they see, permitting you to adapt your firm’s behaviors and solve or prevent problems.

Trying to run a business without a bookkeeper is a high-wire act. Trying to run a firm that uses trust accounts without a bookkeeper is a high-wire act without a net. We don’t advise it.

Is it time for your firm to hire a superlative bookkeeper? Click this link now to be connected to a bookkeeper who can save you time, money, and headaches, and allow you to focus on the law rather than journal entries.