When comparing the job descriptions or roles of bookkeepers and accountants, most people become perplexed. Both vocations are pretty similar, but there are a few key differences. A bookkeeper’s job is to keep track of financial transactions, whereas an accountant manages a company’s whole financial picture. Accounting is evaluating, categorizing, interpreting, and creating financial statements for a corporation. On the other hand, bookkeeping entails keeping track of everyday company transactions, including bill payments, payrolls, and daily income. Both accounting and bookkeeping services Denver are required for a sustainable business.
One of the ways business owners can stay on top of their finances is by understanding the tools and personnel they need to work with to achieve business growth. With that in mind, this article aims to provide all the relevant information about bookkeepers and accountants to enable business owners to understand what to expect when hiring either of them.
Job Description Of A Bookkeeper
A bookkeeper’s job is to keep a consistent record of a business’s daily income and expenditure. Some of the tasks a bookkeeper performs include;
- Recording every financial transaction
- Posting credits and debits
- Handling payroll
- Creating invoices
- Checking and balancing subsidiaries and accounts
In addition to the tasks mentioned above, managing the general ledger is also part of the major duties of a bookkeeper. Some bookkeepers use sheets of paper as the company’s ledger. In contrast, some use bookkeeping software to simplify the process of maintaining ledgers—bookkeepers record every business transaction to facilitate the transfer of records to accountants. The records kept are generally used for calculating tax returns and general tax preparation. In addition, the records are also used for proper budget planning.
Credentials Of A Bookkeeper
Bookkeepers don’t require formal education, but they should know about record keeping, accounting, and financial terms. However, bookkeepers must receive a license and accreditation from the National Association of Certified Public Bookkeepers (NACPB) or the American Institute of Professional Bookkeepers (AIPB).
The American Institute of Professional Bookkeepers (AIPB) accreditation requires bookkeepers to pass a national examination and have a minimum of 2 years of full-time work experience. AIPB also requires bookkeepers to preserve and retain their licenses by engaging in continuing education.
The National Association of Certified Public Bookkeepers (NACPB) offers accreditation to bookkeepers who pass the required tests in various courses. Some of the courses include; small business financial management, bookkeeping, small business accounting, and payroll. The NACPB also offers payroll accreditation to bookkeepers who have completed additional training.
For a bookkeeper to obtain a certified public bookkeeper license, they must pass the required examination, have a minimum work experience of 2,000 hours, and sign a code of conduct. Bookkeepers must also maintain their licenses by taking 24 hours of continuing education every year.
If a bookkeeper obtains the required accreditation and license, it indicates that the bookkeeper is dedicated to acquiring new techniques to better their skills.
Benefits Of Hiring A Bookkeeper
Aside from recording and keeping track of the finances of a business, bookkeepers offer other benefits to business owners. Some of these benefits include
- Reduced Service Cost
Bookkeepers often charge lower service fees than accountants. However, the exact fee charged is dependent on the services required by the bookkeeper.
- Direct Assessment
Though accountants give a comprehensive analysis of the finances of a business, bookkeepers give precise and intricate knowledge of the financial standing of a business. In some cases, an accountant gives an estimated analysis of a business’s financial standing.
Job Descriptions Of Accountants
An accountant’s job focuses on analyzing the financial information stated in a bookkeeper’s record. They analyze the record and give business insight and quality financial advice to business owners. Here are some of the duties performed by an accountant:
- Financial data verification
- Generating reports
- Tax preparation
- Forecasting business growth and opportunities
- guiding business owners to make better financial decisions.
Credentials Of An Accountant
Accountants must first pass through an accredited college or university to obtain a bachelor’s degree in accounting. After obtaining a bachelor’s degree, accountants often obtain various accounting certifications to increase their chances of obtaining better employment. Some of the accounting certifications include; Certified Public Accountant credentials (CPA), Certified Internal Auditor (CIA), and Chartered Financial Analyst (CFA).
Certified Public Accountant credentials (CPA)
Certified Public Accountants are accountants who have passed the Uniform CPA Exam and fulfilled the standard state requirements. They’re also required to undergo continuous education to retain their certification. If you want to hire a CPA, ensure that you hire someone who understands accounting software and taxation law and knows your business.
Chartered Financial Analyst (CFA)
The Institute of Chartered Financial Analysts awards CFA certification. This accounting certification is one of the top-rated qualifications in accounting. The institute trains accountants in ethical financial practices, portfolio management, global markets, etc. To receive CFA certification, accountants must have four years of experience practicing accounting and pass the required three-phase exam. CFAs are highly professional accountants that offer quality service to business owners.
Certified Internal Auditor (CIA)
An accountant with CIA certification can conduct detailed internal audits for various businesses. To obtain this certification, accountants must have 2 years of work experience and pass the required examinations. CIA accountants are exceptionally knowledgeable in handling security monitoring procedures and financial risk assessment.
Benefits Of Hiring An Accountant
Here are some of the benefits business owners can get from working with an accountant;
Before an accountant can be certified and licensed, they must have passed through training and have had several years of work experience. Hence, accountants offer more professionalism in investments and taxation.
- Legal Support
Accountants are trained to gather financial evidence to help business owners handle legal issues, especially with the Internal Revenue Service (IRS)
Similarities between a Bookkeeper and an Accountant
Bookkeepers and accountants are similar because both professionals know accounting processes. Bookkeepers can handle some accounting processes for small-scale businesses, while accountants can handle business bookkeeping services. However, if an accountant is hired for bookkeeping services, they tend to charge more for service fees.
To learn more about the differences between the two professions, you can visit here; https://etacpa.com/denver-bookkeeping/.
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