What Is the Difference Between a Bookkeeper and Accountant?

And, as a home business owner, when do I need each one?

Bookeepers and Accountants
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In short the difference between an accountant and a bookkeeper is that the bookkeeper is tasked with recording financial transactions while an accountant analyzes those transactions.

This is a typical question for new home-business owners. When many home businesses launch, the owner may act as the bookkeeper, accountant or both. But eventually the owner may find that the business is better served by outsourcing one or both of these functions.

Depending on the complexity of the business's finances, the owner may have the knowledge to do bookkeeping but necessarily the time. She may need to ask herself if her time isn't better spent on other tasks, such as long-term planning, sales, employee management, etc.

On the other hand, an owner may find that as her business expands her knowledge of accounting, taxes and other financial issues may not be enough to grow the business. In both scenarios bringing in a professional can free up the owner's time and bring in valuable expertise.

If you are a small business owner, who is doing (or considering doing) her own accounting or bookkeeping you may find these resources helpful:

What Is an Accountant?

An accountant creates and analyzes financial reports as well as designs and manages the financial systems that bookkeepers use to record transactions. The duties of an accountant vary widely depending on specialization, which might be auditing or tax preparation.

A certified public accountant (CPA) has legal certification in the United States. However, not all accountants are necessarily CPAs. There are other types of certifications, such as certified internal auditors (CIAs) and certified management accountants (CMAs), as well as accountants with no legal certifications.

What Is a Bookkeeper?

A bookkeeper performs the everyday accounting-related tasks of recording financial transactions for businesses. Using database and spreadsheet programs, a bookkeeper records all the money flowing in and out a business.

A bookkeeper may also prepare payroll, issue checks and invoices and create reports on taxes, expenditures, profit and loss and cash flow. In large firms a bookkeeper may specialize in areas like accounts receivable or auditing.

Small business bookkeepers are usually generalists who handle many tasks. Small-business owners may also want to consider hiring a company to provide bookkeeping services.

More:

  • Six Steps to Choosing Home Business Accounting Software
  • Accounting and Bookkeeping Terminology
  • Accounting for Startups

If you are a small business owner considering outsourcing these functions, you may find these resources helpful:

  • 8 Reasons to Ditch Your Shoebox Accounting System
  • How to Select and Work with Business Advisors
  • Build Your Small Business Accounting Team

If you are an accountant or bookkeeper looking for a work at home job check out these companies.