Some accountants spend their workdays assessing financial transactions and records to find areas to cut costs, increase income and improve profit margins. A bookkeeper or accountant who chooses to work independently as a consultant or freelancer may benefit from business-related https://www.bookstime.com/ courses. If this is your chosen career path, you can earn a small-business management certificate to learn how to operate your own business. Bureau of Labor Statistics (BLS), bookkeepers can begin a career as a bookkeeping clerk with a high school diploma.
Most states require accountants to be licensed by their state board of accountancy before they can offer services publicly. While bookkeepers may not need any certifications at all, a license is non-negotiable for accountants. Bookkeepers and accountants are both essential to the financial industry, but they require different levels of qualifications. In this guide, you’ll learn what differentiates a bookkeeper vs accountant, which your business should hire, and when to employ them. In this guide, you’ll learn what differentiates a bookkeeper vs accountant, which your business should hire, and when to employ them.
What Is the Difference Between a Bookkeeper & Accounting Clerk?
Nearly all bookkeeping is done using computerized accounting software and programs, so bookkeepers should be comfortable learning new technology if not proficient in it. This is the https://www.bookstime.com/articles/bookkeeper-vs-accountant equivalent of around $45,000 per year, assuming a 40-hour workweek. The advantage of hourly pay is you receive 1.5 times your average wage for hours worked more than 40 per week.
With relevant experience, continued education and certifications, you can qualify for higher-level accounting positions. Bookkeeping is the systematic tracking, recording and organizing of daily financial transactions for businesses, companies or organizations. Proper, meticulous bookkeeping allows organizations to track and accurately interpret critical information. This helps inform businesses’ decisions regarding operations, investments and other financial matters. There is a difference between an accountant and a certified public accountant (CPA).
Revenue vs. Earnings: Understanding Your Revenues, And How Revenue Differs From Earnings
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. 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 you have the tools you need to make sound business decisions and implement healthy cash flow strategies. As an accountant, you must pay attention to figures and financial details, but it is more essential to possess sharp logic skills and big-picture problem-solving abilities.
- Business owners can hire professional bookkeepers and accountants as part of their payroll, or hire an external team to fill these roles.
- A notable factor in hiring bookkeeping and accounting professionals is that it can be seen as a real investment, and it often brings you more in revenue and savings than you end up paying.
- Professional certifications like the Certified Bookkeeper (CB) designation from the American Institute of Professional Bookkeepers can also be beneficial to those looking to enter this field.
- You may also be an ideal bookkeeping candidate if you want a good job with a respectable wage and decent security but may not be looking for a long-term career.
- While some accountants do perform bookkeeping functions, their training allows them to provide additional insights and to be instrumental in planning for future purchases, growth, expansion and more.
- Other industries that employ bookkeepers include insurance and healthcare.
The national average salary for bookkeepers in the United States is a little over $42,000, while accountants earn, on average, about $73,000. Bookkeepers handle the day-to-day tasks of recording financial transactions, while accountants provide insight and analysis of that data and generate accounting reports. While there are certain similarities and overlaps between the two, there are distinctions that set these two roles apart. Bookkeepers don’t necessarily need higher education in order to work in their field while accountants can be more specialized in their training. Because bookkeepers tend to work for smaller companies, they may not be paid as much as accountants. Knowing the differences between the two can help people find their niche in the industry and can give guidance to companies on who to hire for their needs.
How Much Does a Bookkeeper Make?
An aspiring bookkeeper can enter the profession with a two-year or four-year college degree. Average entry-level salaries approach $38,000 per year, according to Payscale. From this viewpoint, bookkeeping offers an appealing path to an accounting career. Unsurprisingly, the BLS identifies accounting, tax prep, bookkeeping, and payroll services as the industry that employs the most bookkeepers. Instead of graduate degrees, bookkeepers can earn professional certifications that indicate greater ability.