Bookkeeper vs Accountant: What’s the difference?
Bookkeeping is the day to day task of identifying, recording and classifying of financial transactions, such as sales and purchases, and it is the foundation of your accounting system. Bookkeepers are critical to operating a business because they gather all the transactional data of your business into one place. Then they organize and categorize the information to show the company’s financial position. Good or bad bookkeeping determines whether your business financial information is timely, relevant and reliable. Therefore your bookkeeping process is the foundation for maintaining reliable business information.
Accounting involves the analyzing, summarizing, interpreting and communicating the business financial information. An accountant is hired to analyze the information organized by the bookkeeper. Then the information is communicated through financial reports and business performance analysis. Business decisions are based on these reports and analysis. But in order to do so, the information must be accurate and up-to-date, since business decisions can make or break business success.
7-Step Accounting Cycle Responsibilities:
- Identify (Bookkeeper)
- Record (Bookkeeper)
- Classify (Bookkeeper)
- Analyze (Accountant)
- Summarize (Accountant)
- Interpret (Accountant)
- Communicate (Accountant)
All the above steps can be completed by a full charge bookkeeper as well. A full charge bookkeeper is an experienced and well trained bookkeeper that can do the job of both bookkeeper and accountant. They can Identify, Record, Classify, Analyze, Summarize, Interpret and Communicate business financial information as well as advise a business owner on their decisions. And who would know better than the person in the accounting day to day?
Bookkeeping should be done everyday to produce up to date and accurate business information. Most accountants are after the fact, when the month or quarter or year is over. So good daily bookkeeping is important to the success of a business. In the long run, good bookkeepers make your job so much easier, and can save you money paying your accountants.
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