Bookkeeper versus accountant: Which one does your business need?

Bookkeeping

What does a bookkeeper do?

• Recording daily transactions – culling from source documents and posting journal entries into accounting software.
• Reconciliations  – reconciling bank accounts and reviewing the general ledger to ensure financial information is posted correctly.
• Data entry – recording the financial data required to process payroll and to track debits and credits. Incorporating changes to employee tax withholdings and wage rates so net pay is calculated correctly.
• Money monitoring – tracking accounts payable and receivable to ensure vendors are paid on time and that collections are received on time.
• Report generation – producing accurate financial statements and other reports for company executives.

Accounting

What does an accountant do?

• Generating financial statements – adjusting the trial balance; generating income statements, balance sheets and cash flow statements.
• Preparing tax returns – producing the financial reports required to generate tax returns; preparing tax filings and sending them to the IRS.
• Addressing government requirements – preparing the legal or compliance documents as required by state or federal law.
• Weighing financial decisions – serving as an adviser for company decisions by providing breakdowns and analyses of financial conditions. For instance, determining the financial ramifications of purchasing new equipment or taking out a line of credit.

Recap, bookkeeper versus accountant

Should you hire an accountant or bookkeeper?

Authors

Kanika Sinha

Kanika is an enthusiastic content writer who craves to push the boundaries and explore uncharted territories. With her exceptional writing skills and in-depth knowledge of business-to-business dynamics, she creates compelling narratives that help businesses achieve tangible ROI. When not hunched over the keyboard, you can find her sweating it out in the gym, or indulging in a marathon of adorable movies with her young son.