Accountant vs. Bookkeeper: What’s the Difference & Which One Do You Need?

Running a business means spending a lot of time on financial management. And for good reason, your finances are essential to the success of your business. 

So, whether you’re a small company trying to figure everything out for the first time or looking to expand, it’s important you know everything there is to know about different financial processes and terms. 

If you’re scratching your head when it comes to choosing an accountant or a bookkeeper, we can help. Covering the key differences between the two options, as well as what each one does, we’ll help you figure out which one you need most.

What Does a Bookkeeper Do?

A bookkeeper tracks financial transactions, keeping a record of all the money coming in and going out of your business. They manage your daily cash flow, maintain accurate ledgers, and make sure your accounts are up to date. 

Here are some of the key responsibilities of a bookkeeper:

• Recording daily financial transactions
• Managing general ledgers
• Bank reconciliation
• Generating invoices
• Assisting with payroll
• Tracking cash flow

Bookkeepers are a great asset to any company and often work for multiple clients at a time. They’re especially beneficial for small businesses. 

What Does an Accountant Do?

An accountant has a greater level of financial responsibilities. They often work on analysing financial data to contribute to the overall business strategy. They also take more of a leading role in tax compliance and carrying out audits. 

Key responsibilities of an accountant include:

• Preparing financial statements
• Tax preparation and compliance
• Conducting audits
• Financial forecasting and budgeting
• Providing business advice and financial analysis

Accountants are most concerned with financial forecasting to help with the future of the business and they mainly work for one company at a time, meaning they’re ideal for larger organisations. 

Accountant vs. Bookkeeper – Key Differences

Understanding the key differences between an accountant and bookkeeper is essential for any business owner. 

Here’s a more detailed comparison between the two options, to help you figure out which option is right for you. 

When looking at what these differences mean for your business needs, it may help to look at some real-world examples. We’ve put together two scenarios where you may choose a bookkeeper over an accountant and vice versa. 

Payroll management

If you’re looking for simple payroll management, a bookkeeper will make sure your employees are paid on time. They’ll help with the tracking of hours, calculating wages, and deducting taxes. 

Business strategy

An accountant can provide an in-depth analysis of your financial situation, which will help to inform your overall strategy. They’ll offer their expert advice into how you can make savings and where to focus your efforts, ultimately helping with business growth. 

These are just two examples of how a bookkeeper or accountant can help your business. Most organisations have a lot more requirements than this, which is why you must consider the bigger picture in order to find the best fit for your business.

Do You Need an Accountant or a Bookkeeper?

Now that you know the key differences between an accountant and bookkeeper, it’s time to decide which one is the most suitable for your needs. Let’s take a look at some common business scenarios to help you make the right choice. 

Choose a bookkeeper if you need help with: 

• Processing payroll 
• Managing accounts payable and receivable 
• Daily tracking of income and expenses 
• Reconciling bank transfers 
• Generating invoices 

If you’re a small business owner who can no longer keep track of payroll and your regular transactions, a bookkeeper may be the best option. 

Choose an accountant if you need help with: 

• Preparing compliant tax returns 
• Financially-motivated business strategy 
• Expert cash flow analysis 
• Advise on forecasting, budgeting, and business growth 
• Auditing financial records 

An accountant is incredibly beneficial for large and growing businesses, focusing on prioritising business strategies and expert advice.

Despite there being a number of differences between an accountant and bookkeeper, they both offer a range of benefits. For many businesses, it may be more appropriate to hire both, so keep this in mind when assessing your financial needs. 

Either way, it’s important you make the right financial decisions for your business. Otherwise, you could face a wealth of challenges in the future. Do your research and explore every option before deciding whether you want a bookkeeper or accountant - or both!  

Looking to take your finances to the next level? Use the QuickBooks directory to find an accountant in your local area.