In this article, we will explore and clarify the variances, responsibilities, and required skill sets of both accounting clerks and bookkeepers. However, bookkeeping offers a wider range of opportunities for career growth and specialization. With experience and additional certifications, bookkeepers can advance to roles such as accounting supervisors, financial analysts, or even controllers. Accounting clerks may progress to become senior accounting clerks or pursue further education to become accountants. Bookkeepers, accountants and certified public accountants (CPAs) all work with businesses’ financial data.
These elements are tracked and recorded in documents including balance sheets, income statements, and cash flow statements. Accounting systems An accountant or bookkeeper can also help you choose the right accounting software and set it up so that it works well for you and your employees – especially your bookkeeper. A business must use three separate types of accounting to track its income and expenses most efficiently.
- For example, a car manufacturer aims to save two percent on car production costs over the course of the next fiscal year.
- Many smaller companies and startups do their bookkeeping on software that is recommended by accountants.
- This is the equivalent of around $45,000 per year, assuming a 40-hour workweek.
- The primary difference between accountants and bookkeepers is that bookkeepers focus only on documenting financial information and transactions, while accountants provide advisory and analytical services.
You must have a minimum of 150 postsecondary education hours, or what amounts to a bachelor’s degree in accounting, and an additional 30 hours of graduate work. The BLS expects both accounting clerks and bookkeepers to see some job losses with a 1 percent decline between 2016 and 2026. It notes that automation of bookkeeping tasks leads to fewer bookkeepers needed and that bookkeepers can expect to work more as analysts as a result. However, there will still be accounting clerks and bookkeepers needed to fill positions that others leave, meaning those wanting to work in either role can still expect good opportunities finding jobs. There are some circumstances for which it is better to hire a full-time professional to assess your finances, whether that’s a bookkeeper or an accountant. If your taxes are complex and include managing multiple income streams or foreign investments, it’s best to hire an accountant who can keep you up-to-date.
Accounting Careers for Working Mothers
The single-entry and double-entry bookkeeping systems are the two methods commonly used. While each has its own advantage and disadvantage, the business has to choose the one which is most suitable for their business. Bookkeepers also post transactions using journal entries that track all account activities. Know you’re set up right with help from a QuickBooks expert who can help you connect your banks and credit cards, and learn best practices to use QuickBooks with confidence.
You’ll usually be trained on the job to work with your specialized area as an accounting clerk or overall accounting functions as a bookkeeper. If you want to showcase your bookkeeper knowledge, you can take the voluntary Certified Bookkeeper certification exam offered by the American Institute of Professional Bookkeepers. Proficiency in accounting software and tools is essential for both accounting clerks and bookkeepers. Common software used includes QuickBooks, Xero, Sage, and Excel, which facilitate tasks such as data entry, financial statement generation, and bank reconciliations.
- While an accountant can fulfill several roles, every business may have unique requirements.
- As the function of accounting is typically more diverse than bookkeeping, hiring an accountant may allow you some flexibility.
- Another key responsibility for accountants includes conducting routine audits to ensure that statements and the books are following ethical and industry standards.
- Since accountants use the information gathered by bookkeepers to prepare larger financial statements and reports, the accounting process wouldn’t be possible without the help of bookkeepers.
- The BLS is committed to providing data promptly and according to established schedules.
Bookkeepers who excel at their jobs are also sometimes promoted to accounting positions, even if they lack the level of education the company typically prefers. Contrarily, accounting clerks often do their duties in an office setting among other workers. During regular business hours, they typically work full-time, however, some businesses might allow for overtime when necessary. A bookkeeper is someone who records a business’s daily transactions in a ledger.
Can these roles be automated or replaced by technology?
When it comes to bookkeeping, some business owners choose to manage those tasks themselves. You may not mind balancing the books and handling financial transactions, and software like QuickBooks Online, FreshBooks and Xero can automate a significant amount of this work. But as your business expands, bringing on a bookkeeper can alleviate your workload and free up your time to devote to other areas of the business. Yes, both bookkeepers and accounting clerks can work remotely, especially in the digital age where cloud-based accounting software enables access to financial records from anywhere. Remote work has become increasingly popular due to its flexibility and cost-saving benefits for businesses. However, some roles may still require in-person presence, particularly in industries with sensitive financial information.
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What’s the Difference Between Accountants and Bookkeepers?
Familiarity with electronic spreadsheets and word processing software is also crucial for efficient record-keeping and reporting. Every business, big or small, needs someone to handle its financial obligations. Determining whether to hire a bookkeeper or accountant depends on the scope of these obligations. Many smaller companies and startups do their bookkeeping on software that is recommended by accountants.
While salary ranges can vary depending on factors such as experience, location, and company size, bookkeepers generally earn higher salaries compared to accounting clerks. A bookkeeper, on the other hand, focuses on the daily financial operations of a business. They maintain accurate records of financial transactions, including income, expenses, and bank reconciliations. Bookkeepers also generate financial reports, such as balance sheets and income statements, which are essential for monitoring the financial health of a business.
Bookkeeping
A bookkeeper is the person on your team who handles your business’s books the most. They are responsible for maintaining the ledger, whether that’s analog or via an automated accounting software, and ensures the books stay balanced. It’s helpful to understand the different roles of a bookkeeper and an accountant so you can utilize them appropriately as your business grows. Although they both have a hand in your company’s finances, their skill sets and purposes vary.
Bookkeepers are employees who are in charge of the company’s general ledger. They are well-versed in basic accounting principles, and they apply these in their work. Bookkeepers manage the entry of items in the general ledger, assign items into their proper categories, and ensure that the entries are balanced. They also act as auditors by checking the what are held to maturity securities accuracy and veracity of the receipts or vouchers in their possession before entering them into the system. When deciding whether you should hire an accountant vs a bookkeeper, the answer will depend on what kind of help your business needs. These steps require a more in-depth understanding of finances, so an accountant will typically perform them.
Bookkeeping vs. Accounting: What’s the Difference? (
Bookkeeping provides the raw data used in accounting, while accounting uses this bookkeeping information or data to produce useful information for decision-making. Bookkeepers play a vital role in managing financial records, while accountants offer valuable expertise and financial advice. Depending on your needs, you may want to consider working with both a bookkeeper and an accountant. Regardless of the type of bookkeeping a company chooses, recording the day-to-day business financial transactions is an integral part of accounting.
There is also ample opportunity for on-the-job training, apprenticeships, and post-secondary coursework that can help someone become a skilled bookkeeper. Having accurate records and an up-to-date awareness of how your business flows on a short-term basis is a key component for deciding where to go next, and that’s where a bookkeeper comes in. While a bookkeeper will remain an important partner for strengthening that foundation of a company, when it comes to creating pathways for the future, you should look to an accountant. A bookkeeper can be the business owner, an in-house employee, freelancer or professional from an online bookkeeping service like QuickBooks Live or Bench. Some accountants have a bachelor’s degree in accounting but no CPA certification.