Bookkeepers & Accountants: What’s the Difference?

I am often asked how my work differentiates from the work an accountant does, and if we’re being honest, an accountant can do what a bookkeeper does. However most accountants don’t want to do the bookkeeping work, they want to do the accountant work. Which begs the question:

What do bookkeepers and accountants do?

Bookkeepers are responsible for recording daily financial transactions accurately. This includes sales, purchases, receipts, and payments. They also update and maintain the general ledger, which is a comprehensive record of all financial transactions. Bookkeepers reconcile bank statements, credit card statements, and other financial accounts, and generate basic financial reports, such as profit and loss statements and balance sheets. Sometimes they manage payroll processing as well, including recording payroll expenses and ensuring employees are paid on time.

After the bookkeeper has done their duty, the accountant gets involved. Accountants analyze the financial data provided by bookkeepers to interpret and assess the financial health of the business, and to prepare tax returns and provide tax planning advice to minimize liabilities and optimize tax benefits. They may also offer financial advice for growth, investments, and how to make informed financial decisions to the business owner. Here’s a venn diagram of two positions:

Overall, we really do work together to support your business. I like to sometimes say an accountant is a bookkeeper’s boss, because if adjustments need to be made to the books, the accountant is the one who tells the bookkeeper what and how to adjust. The truth is though, we all work together. A business is like the top of a table: it can’t stand without legs. Each leg represents a different person who supports the business, be it an accountant, bookkeeper, insurance agent, or banker. We all work to keep you going, so you can enjoy running a business successfully. If you are in need of a support leg for your business table, give me a call and let’s see what we can do.