Compare in-House vs Outsourced Bookkeeping & Accounting

Now that you know the functions of bookkeeping and accounting as well as a little bit about their history, let’s discuss what the day-to-day responsibilities of a bookkeeper and accountant look like. Department of Labor’s Occupational Handbook, some of the most in-demand accounting jobs include comptroller, accounting manager, senior tax accountant, and internal auditors. Bookkeepers are usually responsible for documenting or checking financial data for a company or client, including checks received or written, invoices, cost spreadsheets, and monthly or quarterly revenue. A bookkeeper is skilled at keeping documents and tracks a wide net of financial information. There are critical differences in job growth and salaries between the two.

This practice helps establish the company’s financial outcomes and allows owners to track where their money is going. Choosing a bookkeeping and accounting service for your business depends on which can support the needs of your business the most. In-house bookkeeping and accounting might be right for some businesses, however, many businesses find outsourcing their financial needs is easier and more cost effective. In fact, working with an outsourced service can often make existing employees more effective by establishing streamlined procedures and training them in the best-in class policies. They can then report to an Outsourced Controller who provides oversight and can produce the financial reporting your business needs. Financial reporting will be on time and accurate when outsourcing because employees are trained, experienced and only focus on their core job descriptions.

Bookkeeping vs accounting: What’s the difference?

As a bookkeeper, your attention to detail must be almost preternatural. Careless mistakes that seem inconsequential at the time can lead to bigger, costlier, more time-consuming https://simple-accounting.org/bookkeeping-vs-accounting/ problems down the road. Rarely does a bookkeeper work on one big project for an eight-hour shift; instead, a typical workday involves juggling five or six smaller jobs.

• In addition, bookkeepers should be familiar with basic accounting principles and computer software programs such as Microsoft Excel and QuickBooks.
• We’ll go into the job specifics a little later— but first let’s take a look at the functions of a business accountant.
• In fact, many aspiring accountants work as bookkeepers to get a foot in the door while still in school.
• Bookkeepers are often employed by professional, scientific and technical services companies, retail or wholesale companies, or financial firms.

Many employers also prefer accountants who are certified public accountants (CPAs). To become a CPA, one must pass the Uniform Certified Public Accountant Examination administered by the American Institute of Certified Public Accountants (AICPA). Bookkeepers and accountants both handle financial matters but their roles vary significantly when it comes to managing money within businesses or organizations. Many small businesses don’t have the employment capacity to hire internally, so many opt for external bookkeeping and accounting services. In 2012, the lowest-paid 10 percent of accountants earned $39,930 or less per year, while bookkeepers in the same tier received $21,610 or less annually, reports the BLS.

Bookkeeping Tasks

However, significant differences exist, like work conducted in each career and needed to be successful. The following analysis compares the education requirements, skills required, typical starting salaries, and job outlooks for accounting and bookkeepers. Entry-level positions require at least a bachelor’s degree in accounting, though some employers prefer a graduate degree.

The top-paying state for bookkeepers was Connecticut, where salaries averaged $42,190 per year. When a bookkeeper wants to leap to being an accountant, they will need to take the CPA exam, plus earn a bachelor’s degree (most of the time), if they do not have one already. Fifty states plus the District of Columbia require accountants to earn 150 credit hours of college education before taking the https://simple-accounting.org/ national four-part Uniform CPA exam. As an accountant, you must pay attention to figures and financial details, but it is more essential to possess sharp logic skills and big-picture problem-solving abilities. While bookkeepers make sure the small pieces fit correctly into place, accountants use those small pieces to draw much more significant and broader conclusions about a company’s finances.

Bookkeeper vs. Accountant: Salary and Growth Trends

This includes where your business stands financially, what that means for your business, what you should do about it if anything, and where your business should go from here. Still stumped on how to handle bookkeeping vs. accounting tasks for your small business? Small business accounting software like QuickBooks helps you track your business finances all in one place, making it easily accessible to you and your accounting team. Accountants use bookkeeping records to assess big-picture finances and make smart business decisions. They also provide insights about the company’s overall financial health to business owners and other stakeholders. Since accountants use the information gathered by bookkeepers to prepare larger financial statements and reports, the accounting process wouldn’t be possible without the help of bookkeepers.

As mention, there are some additional certifications accountants can obtain if they wish to advance their expertise. Thanks to Pacioli’s double-entry method, today’s small business owners can get a comprehensive look at where their business stands, with the help of a bookkeeping and accounting team. As most things these days, bookkeeping has transitioned from the paper scrolls and feather pens from Pacioli’s days to managing business finances online. This allows business owners and their finance teams to update and access information remotely, and centralize their financial data in one repository, rather than tracking countless accounting journals. Accounting, tax, bookkeeping and payroll services supply most of the jobs for accountants and bookkeepers.

How Much Does a Bookkeeper Make?

This decline can be attributed to the role of technology in automating many of the transactional functions of bookkeepers. Popular software has made it possible for many business owners to track their financial information, while accountants provide deeper insights and advice that software can’t replicate. It can be a difficult decision for small business owners to decide if and when to hire a bookkeeper vs accountant.

• Bookkeepers who excel at their jobs are also sometimes promoted to accounting positions, even if they lack the level of education the company typically prefers.
• Understanding the differences between these two careers can help you to make the right decision.
• The CPB credential, on the other hand, is more comprehensive and among the most popular professional designations for bookkeepers to earn.
• Bookkeeping and accounting are sometimes used interchangeably—but there are distinct differences between these roles.