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5 Major Differences between Accountant and Bookkeeper
For people from non-commercial backgrounds, it isn’t easy to define the differences between accountants and bookkeepers. Generally, both lines of work are mixed.

Here, bookkeepers stand as army troopers at the very initial level. They commence all the accounting activities.

The accountant’s work is analytical and advisory in some manner and is also based on bookkeeping activities.

On the other hand, the roles of bookkeepers and accountants are equally significant when it comes to precisely proclaiming financial activities and the business’s overall performance. As a result, demand for such professionals is increasing in business organisations worldwide.

For a better understanding of both activities, let us have a glance at the simple definition of bookkeeping and accounting–

Bookkeeping

It is a daily activity of regularly recording financial data relevant to business operations. Bookkeeping is classifying, recording and analysing business transactions in a pre-determined professional format.

Accounting

It is a process of identifying, measuring, and communicating financial information to entitle certain judgments and decisions by the information users—the firm’s economic position.

Now, it may be clear what precisely both activities are about. Let us further discuss some of the main functions Bookkeepers and Accountants perform.

The following functions are vital components to assemble a strong organisation. These are the major activities performed by Bookkeepers:

  • Recording financial transactions daily.
  • Precisely posting credits and debits daily.
  • Processing invoices, receipts, payments, general ledgers, etc.
  • Payroll related work.
  • Adjusting multiple accounts and creating adjustment reports.
  • Managing accounts payable and accounts receivable
  • Calculating GST.
  • Lodging and preparing Business activity statement (BAS).

As we shared before, an accountant’s work is more analytical, calculative and advisory in nature, and it overlaps many of the above-mentioned expert activities in some manner.

As their work defines their activities, they can not only help in general accounting activities but also analyse past performance, draw financial projections for your business, and guide you through future economic activities to be performed for healthy business operations.

Services performed by accountants include:

  • Tax assessment, planning, and advice.
  • Preparing financial statements.
  • Interacts with internal and external auditors for auditing purposes.
  • Analyse and review budgets and expenditures.
  • Business concerned assistance.
  • Corporate financial reporting and compliance.
  • Guide superannuation funds.
  • Resolve accounting disparities.
  • Analyse and compile financial information to prepare a general ledger.
  • Supervise financial management.
  • Developed, recommended, and managed financial databases through manual documents and computer software systems.
  • Completing Payroll related works.

This was just a short glance at works performed by Bookkeepers and Accountants, but in reality, it is a vast arena with many complex and complicated tasks to complete.

Now let’s see five significant differences between Accountant and Bookkeeper:

 Based on purpose

  • Preparing financial statements
  • Accountants measure, prepare, analyse, and interpret the financial statement to collect and represent financial statements.
  • Meanwhile, bookkeepers record all receipts, revenues, expenditures, etc., to create an accounting ledger.

Based on a management role

  • Top management is particularly interested in accountants’ work because they are highly concerned with the information and projections an accountant draws.
  • Top management is less concerned with how the bookkeeper functions.

Based on Tools

  • Balance sheet, profit and loss account, cash flow statement, and position declaration.
  • General ledger, supplier ledger, customer ledger and cash book.

Based on decision empowerment

  • Business decisions can be made based on the accountant’s archives.
  • The financial decisions cannot be made merely based on the bookkeeper’s records.

Based on skills

  • Due to the complexity of work, accountants require special analytical skills.
  • Bookkeepers do not require special skills as most work is in pre-determined formats.

Accountants & Bookkeepers Crucial for Financial Success

Hence, the conversation about differences between Accountants and Bookkeepers is essential because it’s a vast battlefield. Most companies are confused about which designation to choose between them.

But while selecting any of them, the company should review the difference between their functions and activities. Whichever assignment fits the requirements of the company should be chosen.

Companies often opt for Bookkeepers and get outsourced accounting work from other CPA institutes for financial decisions. This is the most cost-effective and convenient way of getting accounting information updated.

To make educated choices, it is crucial to understand the difference between accountants and bookkeepers. While accountants deal with the company’s big picture, bookkeepers deal with the day-to-day transactions.

For all-encompassing financial management, many companies use in-house and outsourced bookkeeping services. Rely on Outbooks tailored outsourcing solutions to streamline your financial processes.

Reach us at [email protected] or 44 330 057 8597 to learn more about our outsourcing accounting and bookkeeping solutions!

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