Bookkeeper vs. Accountant: Is There a Difference?

What does a bookkeeper do vs. an accountant? They each focus on a company’s financial health and work toward its economic well-being. But ultimately, the responsibilities and skill sets of accountants and bookkeepers differ.

Accountant and bookkeeper differences are visible in their daily activities. Bookkeepers keep track of money, maintain financial records, and generate reports. Accountants, on the other hand, take a more strategic and advisory approach, including tax preparation, data analysis, and financial planning.

Interested to know more? Read on to learn more about the differences between bookkeepers and accountants so you can decide which is a better fit for your business!

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RELATED: Accountant vs. Financial Advisor: Which Should You Hire?

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Bookkeeper

Bookkeepers spend most of their day keeping records and creating reports. Your bookkeeper will log financial transactions, recording accounts receivables, accounts payables, and payroll. Bookkeepers form the financial backbone of an organization. They maintain the business accounts and systems and generate reports.

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Top Skills for a Bookkeeper

When you look at a bookkeeper vs. an accountant, one difference is that bookkeepers can acquire the knowledge and experience they need through different paths of experience and education, not only through a University degree. However they achieve them, the right combination of hard and soft skills is essential.

Here are some top skills you want to see in a bookkeeper you hire.

• Attention to detail
• Strong and proven math skills
• Data entry
• Invoicing
• Accounts payable
• Experience with accounting software (preferably the one you use)
• Organization
• Communication
• Problem-solving
• Spreadsheets
• Time management
• Transparency

Interviewing a Bookkeeper

Whether interviewing in person or over the phone, you want to ask questions that will get more than a yes or no answer. Here are a few interview questions you might ask a candidate for a bookkeeping position. Feel free to follow up or ask for more details during the conversation:

1. What drew you to a career in bookkeeping?
2. What accounting software have you used? Do you have one you prefer, and why? Are there any you’d like to learn to use better?
3. What are the pros and cons of cash basis versus accrual reporting?
4. How do you prepare and process invoices?
5. If you were processing accounts payable, would that use credit or debit? Why is that so?
6. What items are included in a balance sheet?
7. Tell me about the difference between a balance sheet and an income statement.
8. How would you find the error if you noticed your ledger was off? Tell me about a time you saw something was off and tracked down the error.
9. Tell me about a time you helped recover a missing payment for a client or your company.
10. What is your approach to deadlines? What is the biggest challenge you come across with time management?
11. Have you worked with accountants in prior positions? How did you work together, and what do you see as the ideal working relationship between a bookkeeper and an accountant?
12. Imagine you worked with a boss who wasn’t comfortable with numbers and had a big-picture approach. How would you communicate with them if numeracy wasn’t their skill?
13. How do you stay current with accounting trends, procedures, and practices?

Accountant

An accountant analyzes the records and reports compiled and maintained by the bookkeeper and uses them to help a business strategize and plan.

Where bookkeeping is about careful record keeping and managing a business’ daily cash flow, accounting is more about achieving the client’s financial goals and adhering to financial rules and laws. Accountants provide tax planning, financial planning, auditing, and assurance. For example, they may help create a financial plan for an expansion of the team or into a new location. Accountants, vs. bookkeepers, are also more often responsible for tax preparation.

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Top Skills for an Accountant

Accountants typically need a four-year degree plus certifications. The top skills you’ll want in an accountant include the following:

• Knowledge of accounting practices
• Proficiency in accounting software
• Ability to prepare financial statements
• Knowledge of general business practices
• Ability to analyze data
• Strong attention to detail
• Critical thinking
• Organization
• Time management
• Written and verbal communication
• The ability to remain calm under pressure
• Ethics
• Continual learning

Interviewing an Accountant

Interviewing an accountant is different than interviewing a bookkeeper. You need to ensure a bookkeeper has all the hard skills necessary to do the job, but accountants need to be skilled and knowledgeable and also have several soft skills.

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For an in-depth look at how to interview an accountant, including 25 questions you can use, see our blog, 25 Impactful Accounting Interview Questions to Ask.

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Bookkeeper vs Accountant: Who Do You Need For Your Team?

The decision to hire an accountant vs. a bookkeeper, or both, depends on the size and complexity of your business.

A bookkeeper may be an ideal fit if you have a small business with straightforward financial transactions and need someone to take over tasks like accounts payable and payroll. They will free up time to focus on growing and managing your business.

As a company grows and its finances and planning become more complex, an accountant can help with in-depth analysis, budgeting, forecasting, or advice on financial strategy.