Bookkeeper vs Accountant: Comparing Careers and Growth

In the U.S. accountants need to have at least an undergraduate degree in accounting, or more rarely in finance or business. Those wishing to work for larger companies pass the examination necessary to become a Certified Public Accountant (CPA) granted by The American Institute of Certified Public Accountants (AICPA). Certified Public Accountants can represent their clients before the IRS, work for a public company, and assist with an array of official bureaucratic and financial matters on all levels. Mid-size and small public accounting firms pay, on average, about 10% less than these firms. If you choose to work for a company internally instead of in public accounting, the starting salary range is very broad.

A bookkeeping certification is an official demonstration of a person’s bookkeeping skills. It’s a way to show your skill set to potential employers and others in your professional network. You can earn a bookkeeping certification through a college, a university or an accredited professional program. One of the biggest challenges many financial professionals face is being able to create up-to-date, accurate and easy-to-understand financial reports from their accounting software. If you have a large company that has a complex structure and you make money from various different sources, you might need a larger financial management department that usually includes an accountant or even a CFO. They will usually work with bookkeepers and various administrative support staff who will take care of AR, AP and so on.

Bookkeeping vs accounting: what’s the difference

A better option would be to use a service like QuickBooks Live virtual bookkeeping, where your bookkeeper costs would not be affected by where you live but rather how much your business expenses are per month. Depending on how much work you have and how long you need services, a contracted worker might be a better option. Bookkeepers have a wide variety of skills, so one of the factors you need to consider is what you need them for. If it’s basic client billing and documentation, a good solution may be accounting software that can assist you if you still want to play a more hands-on role. While these exact figures can change over time, the cost comparisons of covering your bookkeeping and accounting needs can vary greatly depending on the type of individual you hire.

For example, an accounting assistant might prepare invoices, manage sales transactions or organize travel arrangements for executives. Bookkeepers typically handle only tasks related to the accounting department, such as processing receipts and payments and maintaining records. Qualified accountants typically hold a bachelor’s degree in accounting or finance, as well as some prior work experience in finance as they will be delivering financial advice.

Career Paths

In essence, they are responsible for both the current financial condition as well as the company’s financial future. Students with eligible credits and relevant experience on average saved $11k and 1 year off their undergraduate degree with University of Phoenix. However, be aware that business size does affect a bookkeeper’s workload and may lead to you paying more or even for a second bookkeeper to alleviate some of that burden. Eliminate manual data entry and create customized dashboards with live data. In addition, you must be a member of the Association of Certified Fraud Examiners. In most cases, employers want to hire someone with a bachelor’s degree, and a master’s degree may help boost your earnings.

• There is no magic number to know when you’re ready to take on a bookkeeper for additional support.
• Bookkeepers who are interested in switching jobs but do not have a college degree might consider becoming an EA after a stint with the IRS.
• These responsibilities are generally assigned to your bookkeeper or accountant.
• According to the Robert Half Salary Guide, the CPA is one of the top certifications that can give you a nudge toward the upper 95th percentile.
• Bookkeeper’s responsibilities are keeping track of the company’s financial records and documenting them in appropriate journals or ledgers.

Bookkeepers’ duties include using software and spreadsheets to record information about transactions, spending, cash flow, income and other finance-related data. They enter numbers into the system, but they do not analyze them beyond verifying their correctness. Whether you opt for basic bookkeeping or full-service bookkeeping and accounting, either option can help you be better prepared come tax season. Full-service bookkeeping is everything you’d find in basic bookkeeping with additional accounting services and financial statement analysis.

Careers in accounting and bookkeeping

You may also consider using online bookkeeping services and accounting software to save time and money, all while meeting your bookkeeping needs. These are just a few examples of accounts that bookkeepers may be responsible for maintaining for your small business. This responsibility alone can become a huge burden for business owners to balance between managing employees, ensuring customer satisfaction, and promoting business growth. Many business owners choose to outsource both bookkeeping and accounting roles to focus their efforts on growing their business. The difference between bookkeeping and accounting services is definitely reflected in the cost. According to the Bureau of Labor Statistics, the median pay for accountants was $77,250 per year ($37.14 per hour).

There is a difference between an accountant and a certified public accountant (CPA). Although both can prepare your tax returns, a CPA is more knowledgeable about tax codes and can represent you if you get audited by the IRS. A bookkeeper with professional certification shows they are committed to the trade, possess the skills and expertise required and are willing to continue learning new methods and techniques. Staying on top of your finances is a key part of being a successful small business owner. Your financial data must be current and accurate so that you have the tools you need to make sound business decisions and implement healthy cash flow strategies.

Harold Averkamp (CPA, MBA) has worked as a university accounting instructor, accountant, and consultant for more than 25 years. Join over 1 million businesses scanning receipts, creating expense reports, and reclaiming multiple hours every week—with Shoeboxed. Join over 1 million businesses scanning & organizing receipts, creating expense reports and more—with Shoeboxed. Turn your receipts into data and deductibles with our expense reports that include IRS-accepted receipt images. Step into the role of an analyst at a major investment bank with this free job simulation from JPMorgan. No matter what the case is for your nonprofit, you’ll need to conduct the same steps to hire the right person.

Many software services combine the two to create a streamlined operation that can make financial recommendations based on recordings. This can be helpful for minor operations, but if you’re serious about maintaining your business’ law firm bookkeeping financial health, you may consider hiring for bookkeeping and accounting services. This can help to ensure your team of financial experts factor in all aspects of your operation before making any major recommendations.

Your salary package will vary depending on the type of accounting you choose, the field or industry you work in, your location, and your experience level. By choosing wisely for yourself, you can enjoy a satisfying and prosperous career as a CPA. To become an accountant, you may be required to earn a bachelor’s degree, especially if you’re seeking to qualify to become a Certified Public Accountant (CPA). Depending on the size and the lifecycle of a business, there are multiple options for how to manage the company’s financial operations. There are various roles, both internal and external, that can help with the day-to-day as well as the reporting and strategic advisory. Bookkeeping still offers a stable career path that does not demand advanced degrees or extensive training.