When thinking about a career in the financial industry, it can be hard to know the difference between accounting and bookkeeping. What exactly does an accountant do? And what does a bookkeeper do? We’ve done our research and compiled all the information you need to know about these careers and what their differences are.
What is accounting?
Accounting “is the measurement, disclosure or provision of assurance about financial information that helps managers, investors, tax authorities and others make decisions about allocating resources.” Accountants are professionals who perform different accounting functions, like financial statement analysis or audits- just to name a few.
Accountants prepare and inspect all sorts of different financial records. Their job is to make sure those records are accurate, find mistakes, and essential assess the financial operations of the company to make sure things are running properly.
These types of professionals work in accounting firms, financial institutions, government agencies, nonprofit organizations, manufacturers, retailers, and more. Usually, an accountant has a college degree in finance or accounting. On average, an accountant makes a little under $70,000 per year, according to the Bureau of Labor Statistics.
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What is bookkeeping?
Bookkeepers are usually in charge of specific financial records. They usually work for small or mid-sized companies to make records of all of the financial transactions. These records can include purchases, payroll, sales, payment of bills, etc. People who keep books must have great math skills, superior attention to detail, and the ability to be discreet.
A bookkeeper’s job is to work with the company’s accounts to make sure that every penny of the company’s finances is accounted for. They’re usually the first ones called upon when the company wants to know where money is going and are responsible for finding any discrepancies.
On average, bookkeepers make just under $40,000 per year. This type of job is typically more of an entry-level job and does not require a degree or special certification.
What is the difference between accounting and bookkeeping?
The difference between these two careers is mainly in education and responsibility. Accountants are responsible for more of the financial aspects of a company than a bookkeeper is. While a bookkeeper typically handles where the money comes in and goes out, an accountant is responsible for almost every aspect of the finances. They can handle taxes, assess risk, or make reports.
A bookkeeper’s job environment may also be more limited than an accountant’s. An accountant can work at many different places, like government agencies, financial institutions, and tax agencies. Bookkeepers on the other hand, usually work for smaller companies. Larger companies and institutions have more use for an accountant.
Just a high school diploma and some knowledge about math can get you in the door when it comes to bookkeeping. Many bookkeepers actually go on to become accountants. Accountants must at least have an undergraduate degree, and higher positions may require more.
Careers in the financial world are only continuing to grow as companies, their money, and the economy grows as well. Accountants and bookkeepers help companies keep their finances on track and succeed. No matter the difference between accounting and bookkeeping, each one requires good math skills, attention to detail, and superior dedication.