For people from the non-commercial background, it is very difficult to define the difference between an Accountant and Bookkeeper. Generally, both the line of work is admixed together.
Here, bookkeepers stand as troopers of the army at the very initial level. All the accounting activities are commenced by them.
While Accountant’s work is analytical and advisory in some manner and it also based on outsourced bookkeeping services activities.
On the other hand, role of bookkeepers and accountants are equally significant when it comes to precisely proclaiming financial activities and overall performance of the business. As a result, demand for such professionals is increasing in business organizations throughout the world.
For better understanding of both the activities let us have glance on the simple definition of accounting and bookkeeping services –
It is a daily activity of recording financial data relevant to business operations in a regular manner. Bookkeeping is the activity of classifying, recording and analyzing business transactions in the pre-determined professional format.
It is a process of identifying, measuring, and communicating financial information to entitle certain judgments and decisions by the users of the information. Accounting is considered as the activity of informing to other about the economic position of the firm.
Now it may be clear that what exactly both the activities are about. Let us further discuss some of the main functions performed by Bookkeepers and Accountants-
The following functions are key components to assemble a strong organization. These are the major activities performed by Bookkeepers:
As we shared before, 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 they tend to analyze past performance and draw financial projections for your business and guide you through future financial activities to be performed for healthy business operations.
Services performed by accountants includes:
This was just a short glance of works performed by Bookkeepers and Accountants, but in reality, it is a huge arena with lots of complex and complicated task to be performed.
Now let’s see the heart of this article. Yeah, its 6 major difference between the Bookkeeper and Accountant:
On the basis of purpose
On the basis of management role
On the basis of Tools
On the basis of decision empowerment
On the basis of skills
Hence, the conversation about differentiating Bookkeepers with Accountants could not be ended because it’s a huge battlefield. The Most of the companies are confused which designation to be choose between them. But while choosing any of them the company should review the difference between their functions and activities. Whichever designation fits the requirements of the company should be selected. Most of the time companies opt for Bookkeepers and get outsourced the accounting work from other CPA institutes for financial decisions. This is the more cost effective and convenient way of getting accounting information updated.
BY: AJEET AGARWAL