Every business deals with financial data. It’s how business owners gain insights as to whether their company is doing well or not in the global market.
Hence, accountants and bookkeepers are engaged to organise and analyse the numbers. But do accountants and bookkeepers work on the same things?
Accountants and bookkeepers both handle the financial data of a company. They both require basic accounting knowledge, however, they are two different professions. Although they can be very similar because of a few common goals, accountants and bookkeepers do different jobs.
What’s the difference?
Bookkeeping involves the recording of financial transactions and it is more administrative. A general ledger is used to record every sales and purchase made by the business. On the other hand, Accounting is subjective and provides you with business insights depending on bookkeeping information. The accounting process delivers reports—where information from the ledger is turned into statements—that lead to a better understanding of cash flow and profitability of the business.
Here is a simple comparison of work between the two:
- Keeps records of every financial transaction (receipts and payments) in a proper and organised fashion
- Management should not make a decision based on advice from a bookkeeper. (A bookkeeper is not qualified to provide advice)
- Can prepare financial statements, but they must be audited and checked by an accountant
- Required to maintain an understanding of bookkeeping principles. However, does not require an accounting qualification
- Not typically tasked with data analysis
- May perform single entry and double entry bookkeeping
- Required to maintain up-to-date knowledge of financial topics
- Work is overseen and checked by an accountant
- Determines financial situation and convey the information to relevant authorities
- Management can make important decisions based on the data provided
- Can prepare financial statements in the process
- Requires special analytical skills due to the complex nature of the work
- Analyses and interprets bookkeeping information and organises it to create reports
- Prepares a company’s budget or plans loan proposals
- With enough experience and education, can become a licensed accountant—Certified Public Accountant (CPA)
Insights from outsourced accountants and bookkeepers
Many business owners have already outsourced accounting and bookkeeping roles that their company needs. Let’s dive in on some of the views that accountants and bookkeepers have when it comes to their field.
So what should you outsource?
That will depend on your business goals. It’s extremely important to identify the type of work or the kind of results you need when it comes to the financial aspects of your business. Both accounting and bookkeeping work support the whole financial cycle of your company.
If you’re going to outsource your accounting and bookkeeping functions, it’s best to take advantage of the skill sets of your outsourced staff. If they can help you accomplish some of the more important tasks, then, by all means, allow them to. In fact, for some outsourced accounting staff, the job is only done one way—“You either know how to do it or you don’t.”