Bookkeeping Clerk vs Accountant: Key Differences and Career Insights
Accounting clerks, on the other hand, are responsible for bookkeeping, accounting, clerical, and administrative tasks. In contrast, accountants have a holistic view of a business’s financial health. In contrast, accountants usually have a higher level of education and experience, and are responsible for tasks like auditing, tax preparation, and financial reporting. Accounting clerks often work under the supervision of an accountant, who handles more complex tasks like financial analysis and planning. If you’re considering a career in accounting, you might be wondering what the difference is between an accounting clerk and an accountant. Bookkeeping clerks and bookkeepers have different pay scales, as shown below.
Job Outlook: Future Prospects for Bookkeepers and Accountants
- The cash-based system of accounting records revenues when cash is received and expenses when cash is paid out, simplifying profit calculation for smaller entities (smaller businesses, freelancers, and sole proprietorships) by focusing purely on the actual movement of money.
- Accounting Bookkeepers maintain accurate books on accounts receivable and payable, daily financial reconciliations and entries, and payroll.
- It is the accounts in this list, and their corresponding debit or credit balances, that are used to prepare the financial statements.
- Just as managerial accounting helps businesses make management decisions, cost accounting helps businesses make decisions about costing.
- Some of the key tasks for accountants include tax return preparation, conducting routine reviews of various financial statements, and performing account analysis.
Growth for accountants and auditors is expected to continue for the next several years. You must have a minimum of 150 postsecondary education hours, or what What Is Double Entry Accounting and Bookkeeping amounts to a bachelor’s degree in accounting, and an additional 30 hours of graduate work. If you are interested in becoming an accountant, it may be beneficial to your career to become a certified public accountant (CPA), which has its own exam. With bookkeepers, there are a lot of minutiae involved, and keen attention to detail is paramount.
Main differences between bookkeeping and accounting job functions
Most states allow a CPA to work across state lines, but you benefit from working with someone trained and certified in your state’s tax laws. You might also work with a firm that offers both services under one roof, which can ensure consistency. “Accountants tend to come in further down the line and are big-picture people,” says Stephanie Marshall, CEO and founder of A B C S UK, a bookkeeping and accountancy firm.
You can find a certified public bookkeeper (CPB), certified through the National Association of Certified Public Bookkeepers, through the association’s network at NACPB.org. That’ll ensure they understand your business’s unique recordkeeping needs. A professional bookkeeper doesn’t require a certification. For the past 52 years, Harold Averkamp (CPA, MBA) hasworked as an accounting supervisor, manager, consultant, university instructor, and innovator in teaching accounting online. For the past 52 years, Harold Averkamp (CPA, MBA) has worked as an accounting supervisor, manager, consultant, university instructor, and innovator in teaching accounting online.
Tax Preparation and Filing
- It facilitates basic bookkeeping tasks, such as invoicing and expense tracking, but it also offers accounting functions including financial reporting, payroll and tax management.
- The accounting process is more subjective than bookkeeping, which is largely transactional.
- The differences between accounting bookkeepers and accounting clerks can be seen in a few details.
- They lay the groundwork for accountants by providing the necessary financial data to create the balance sheets and income statements.
- With a keen eye for detail and a knack for storytelling, Teri has established herself as a trusted voice in the realm of financial markets news.
- This in-depth look at bookkeeping vs. accounting is part of our complete guide on career paths as a tax preparer.
They’re often the first line of defense in the financial back office—and trust me, you want that line to be solid. They save the business a whole lot of trouble (and sometimes money). Duplicate invoices, weird vendor charges, missing payroll taxes. It’s not glamorous, but if you’re someone who enjoys a good clean spreadsheet and the quiet satisfaction of balanced numbers—this job scratches that itch. In most places I’ve worked, they’re using QuickBooks—or sometimes Xero or Sage, depending on what the business prefers.
Key Takeaways
Bookkeepers and accountants sometimes do the same work, but have a different skill set. Accounting turns the information from the general ledger into insights that reveal the bigger picture of the business, and the path the company is progressing on. The accounting process is more subjective than bookkeeping, which is largely transactional. The IRS lays out which business transactions require supporting documents on their website.
Accounting has broader duties, such as providing insight to company executives about financial and tax planning, compliance, and an overview of a company’s financial performance. Bookkeeping involves recording financial transactions on a daily basis. Bookkeepers and accounting clerks have different pay scales, as shown below. As such, accounting clerks should have a strong background in accounting to manage their tasks better. Accounting clerks are employees assigned to manage administrative and clerical tasks in the accounting department.
Accountants, on the other hand, need to have a holistic picture of a business’s financial health, ensuring taxes are paid properly and identifying potential areas of opportunity and risk. Bookkeepers use accounting software to ensure transaction histories are accurate, performing routine calculations to keep financial records complete. Bookkeepers have a narrow focus and are responsible for recording financial transactions accurately. They may also support senior executives in financial and accounting needs, maintain customer records, and process bills for payment. Their main task is to record financial transactions, ensuring all data is entered correctly.
They ensure taxes are paid properly, identify potential areas of opportunity and risk, and assess financial operations. Bookkeeping is at the bottom of the financial management pyramid, providing a solid foundation for a company’s financial health. The most important skills for a bookkeeper are payroll tax returns, customer service, and reconciliations.
Accountants are responsible for analyzing, interpreting, and reporting the financial information of a company. Becoming a Certified Public Accountant (CPA) requires a higher level of education and a more extensive certification process compared to bookkeepers. There are a couple of prominent certifications for bookkeepers in the United States. Most accountants make around $70,000 a year.2 Accountants are responsible for assessing your business’s finances and making financial recommendations that keep your business in the black.
Assessing these career trajectories empowers you to choose a path aligned with your interests and long-term career vision. At NCC, coursework in both digital and traditional bookkeeping methods ensures you’re comfortable across platforms. Effectively navigating the financial landscape requires proficiency in key tools and technologies common to both roles. By exploring educational options tailored to each position, you’ll be well-equipped to choose the career that best matches your professional goals. Understanding the educational requirements and qualifications for each role can clarify your pathway toward a rewarding career. Understanding these foundational differences helps you identify which career path aligns best with your strengths and goals.
Accounting is the process of tracking the income and expenses of a business or other organization. The equity section of the chart of accounts is based on the fact that the legal structure of the entity is of a particular legal type. A chart of accounts is a list of the accounts codes that can be identified with numeric, alphabetical, or alphanumeric codes allowing the account to be located in the general ledger. These accounts are recorded separately, showing their beginning/ending balance. The ledger is a permanent summary of all amounts entered in supporting Journals which list individual transactions by date. A petty cash book is a record of small-value purchases before they are later transferred to the ledger and final accounts; it is maintained by a petty or junior cashier.
Tax accounts balance compliance with reporting rules while also attempting to minimize a company’s tax liability through thoughtful strategic decision-making. In cost accounting, money is cast as an economic factor in production, whereas in financial accounting, money is considered to be a measure of a company’s economic performance. Analysts, managers, business owners, and accountants use this information to determine what their products should cost. Just as managerial accounting helps businesses make management decisions, cost accounting helps businesses make decisions about costing.
The difference between bookkeeping and accounting is mainly one of responsibility and scope. The differences are crucial to businesspeople, professionals, and students opting for a career in finance. With dedication and continuous learning, you can build a successful and rewarding career in accounting.Learn more about accelerating your professional career by contacting UC Online today! Emerging areas like forensic accounting, environmental accounting, and international financial reporting also contribute to growth in the field. Specifically, those who adapt to advanced software and offer additional services like financial reporting and budget analysis are in high demand. In contrast, accountants have a higher earning potential, with a median annual wage of $79,880.Salaries can vary.
Enroll today or speak with an admissions representative to discuss your career goals so you can choose the best program to meet them. Whether you need to earn your high school diploma first or are ready payroll deductions are to jump right in to a certificate or degree program, we’ve got you covered with 100% online, self-paced, and DEAC accredited education. This is not an exhaustive list, but does show some of the potential areas of focus that an accountant may choose to pursue.
This can affect which services appear on our site and where we rank them. Stay updated on the latest products and services anytime anywhere. But keeping accurate books and understanding what the numbers mean can spell the difference between business success and failure. To maintain their license, CPAs have to continue taking courses throughout their careers. And a Certified Public Accountant, or CPA, is an accountant who has taken a test called the Uniform CPA Examination and met your state’s requirements for state certification.
Furthermore, they help create an organized system, making it easier for accountants to analyze the gathered financial information. Bookkeepers record daily financial transactions, ensuring that every aspect of a small business’s income and expenses is documented. Bookkeepers tend to use more straightforward software tailored towards daily financial tasks, while accountants require advanced systems to provide in-depth analysis and strategic insights. Bookkeepers typically work with user-friendly software designed to automate, simplify and streamline routine tasks such as recording transactions, reconciling accounts, and managing invoices. Bookkeepers are responsible for managing and maintaining a company’s financial records. Bookkeepers are responsible for accurately recording daily business transactions.
They might work with the same financial records, sure, but the scope, authority, and complexity of what they handle? That includes preparing tax returns, running audits, ensuring everything aligns with GAAP (Generally Accepted Accounting Principles), and helping business owners make smart fiscal decisions. At its core, the accountant’s job is to make sense of the numbers, not just record them. What I’ve found is that a good clerk doesn’t just enter data—they notice things. But today, with cloud-based systems and tighter financial compliance rules, the difference has only become more important—especially if you’re thinking about your career path. Knowing the differences between the two financial jobs can help people find their niche in the industry and guide companies in hiring the right person for their needs.
