Bookkeeping and accounting are sometimes used interchangeably—but there are distinct differences between these roles. From required education to day-to-day responsibilities, let’s compare bookkeepers vs. accountants. Both accountants and financial analysts analyze financial data to help clients make informed decisions. However, accountants typically deal with past data, recording and reporting transactions and tracking budgets.

• However, you might hire a CIA if you want a more specialized focus on financial risk assessment and security monitoring processes.
• If you work in a competitive job market, certification can give you a leg up when discussing salary potential with prospective employers.
• Bringing someone on as an in-house full-time employee requires extra costs on your end, such as benefits and health care, whereas contractors are not entitled to these perks.
• FinancePal offers accounting for small businesses so that business owners can get back to handling the other important facets of their business—  like growing profits and keeping customers happy.
• Credentials like the CB and CPB certifications may also help bookkeepers develop the superior skills that boost their overall compensation rates.

Bookkeeper’s responsibilities are keeping track of the company’s financial records and documenting them in appropriate journals or ledgers. Bookkeepers who are interested in switching jobs but do not have a college degree might consider becoming an EA after a stint with the IRS. This job doesn't require a college degree, only five years of tax experience with the IRS. If you are already a CPA, you can act as an enrolled agent without passing the exam.

Bookkeeping vs. Accounting: What’s the Difference?

In short, accountants deal with regular upkeep and reconciliation of the accounts. Accountants are the front-line people as far as the data and numbers are concerned. They are responsible for managing the company's accounts and ensuring proper reconciliation. Their goal is to produce schedules that support the final numbers for each account. How you structure the financial operations will depend on your goals, your available resources and the people you already have on staff and their expertise.

According to the BLS, accountants working in this industry had average annual pay of $75,790 in 2012. On the other hand, bookkeepers working for accounting and related services averaged $36,130 per year in 2012, a difference of almost $40,000. Similar to what bookkeepers and accountants charge an hour, their salary is based law firm bookkeeping on different factors as well. Salaries are typically based on education, certification, years of experience, credentials, industry or employer, job description, location, and complexity of work. Bureau of Labor Statistics for 2021, the national average salary for bookkeepers was $45,560 and for accountants was $77,250.

Andrew Jordan, Chief Operations Officer at FinancePal

Both public and private accountants are well-compensated, and the Department of Labor projects job growth in both fields to be steady (~4% through 2029). That said, public accountants tend to make slightly more income than their private peers in comparable roles. And remember, Certified Public Accountants also tend to make about 10-15% more than non-certified accountants.

Bureau of Labor Statistics (BLS), financial analysts have an average annual salary of $108,790. Analysts working in securities and investing activities (like investment banking) tend to earn more than other types of financial analysts. In fact, first-year analysts at Goldman Sachs reportedly earn a $110,000 base salary — that doesn’t include other forms of compensation analysts may be eligible for, like commission, stock options, and performance bonuses. Although nonprofit bookkeepers and accountants are so frequently lumped into the same category, it’s important to remember the key differences between the two. These differences will help determine the best hiring choices to meet your nonprofit’s needs.

How much does a bookkeeper cost for a small business?

Those who work in finance or insurance are typically on the higher end of this pay scale, and retail and healthcare bookkeepers usually have lower earnings. Bookkeepers are often employed by professional, scientific and technical services companies, retail or wholesale companies, or financial firms. Some accountants spend their workdays assessing financial transactions and records to find areas to cut costs, increase income and improve profit margins. The differences between accounting and bookkeeping start with the educational requirements. Accounting careers may offer flexibility and opportunities across a wide range of sectors.

Nick Charveron is a licensed tax practitioner, Co-Founder & Partner of Community Tax, LLC. His Enrolled Agent designation is the highest tax credential offered by the U.S Department of Treasury, providing unrestricted practice rights before the IRS. Outsourced accounting isn’t always cheaper than in-house, so it’s good to compare the pricing by getting several quotes. There’s a tool called CPA Verify that you can use to do a background check before hiring external help. It will confirm the license and check for any disciplinary action taken against a potential CPA.

A career in accounting or bookkeeping can be both challenging and rewarding. If you’re interested in working with numbers and keeping financial records organized, then one of these positions may be a good fit for you. Though accounting assistants and bookkeepers share some similarities, there are several key differences between the two roles. Applicants interested in becoming a CPA should check with their state board of accountancy regarding CPA eligibility requirements prior to enrolling in any accounting program.

On the other hand, analysts often handle future data, making predictions about a company’s performance using financial models. With many Baby Boomers retiring and the Sarbanes-Oxley Act enforcing higher standards for public corporate accounting, there is currently a shortage of experienced accounting professionals. Businesses, nonprofits, and governments will always need accounting services, and computers won’t be able to replace experienced CPAs any time soon. Therefore, the CPA credential offers a higher level of job security to accountants during a period of otherwise uncertainty. However, earning a bachelor’s degree isn’t the only first step you can take into this career field.