Do you know you like numbers, but you’re unsure what might be a good accounting career path for you? Today, we will try to help you decide if you should become a bookkeeper or accountant.
Accounting and Bookkeeping: Difference
Accounting and Bookkeeping: Is there any difference? Let’s look at a few aspects.
- Knowledge
To be an accountant, one needs formal schooling – it’s good if you are a magister or bachelor. In addition, accountants often choose to get another certification, such as Certified Public Accountant, to receive a competitive advantage (and higher salary). It can take years for one to become an accountant. Many work in some kind of entry-level position before taking on more responsibility.For a bookkeeper, though, formal schooling is not necessary. An individual can learn basic bookkeeping skills on their own using various available resources and take on bookkeeping in their own business or even be hired by someone. One can become a bookkeeper in a relatively short period of time. A bookkeeper can always advance to an accountant position with appropriate education, experience, skill, etc.
- Roles
The roles of an accountant and a bookkeeper are also somewhat different. A bookkeeper usually tracks and categorizes the daily money that comes and goes out of a company. They can do that with software or do it the old-fashioned way in a physical journal. The software allows them to generate reports or one can do them manually. These reports are then used to get taxes done and make management decisions based upon that information. Employee payroll, invoicing, bill pay, reconciliation, and similar tasks can also be completed by the bookkeeper. All businesses need bookkeeping and it has to be done throughout the year. Another reason to become a bookkeeper is that there is a demand for it and there always will be, as long as there will be businesses.
- An accountant’s role is somewhat at a higher level.
There are different types of accountants. In general, they can do all those tasks that a bookkeeper does, but a lot of times they also do taxes, financial analysis, consulting, investing, and a general overview of business finances. A good accountant can look at transactions recorded by a bookkeeper, summarize and make conclusions about how a business is spending or making money and how to improve. Unlike bookkeepers, accountants are usually called upon every once in a while. The exception would be larger businesses that have accountants work on a regular basis. So, a bookkeeper usually communicates with the accountant at least a couple of times a year (e.g. tax time). They usually work together – you cannot produce reports without data and without a report, the data is pointless.
- Salary
The main drivers for bookkeeper and an accountant include their knowledge and skill. Since bookkeepers usually have less of both, their salary is lower. However, this does not mean that a bookkeeper cannot earn more than an accountant. Why? Although accountants can usually demand higher hourly pay, they might not have as many working hours. Thus, if you are looking for a wage that is higher than what an average person earns, then it might be worth considering advancing your education to be able to work as an accountant.
Conclusion
In short, the bookkeeper can provide a company with a very micro view of the financials, while the accountant gives a macro view of business financials.
A person who is considering an accounting career path can start without any formal education or complete a two-year degree program at college and work as a bookkeeper – data entry, work in the accounting department, etc.
This is a good option for those who are still not sure if they are going to like this type of work or not. Working as a bookkeeper also allows one to receive income and experience while advancing their education to work in higher positions.
The four-year degree is going to allow a person to move into all different areas of accounting, which means working with reports, business finance analysis and planning, and things like that and getting a higher salary. The accountant position is optimal for those who are looking for a long-term career in this field. The resources put in to achieve this will surely pay off.
