Bookkeeping vs. Accounting

One of the primary purposes of bookkeeping and accounting is to have audited financial statements at the end of accounting periods and the fiscal year. Transactions are recorded. Receipts and detailed records are kept on file.There are some main differences between the role of a bookkeeper and the role of an accountant.

Basic Differences between Bookkeeping and Accounting

 

The bookkeeper…

• is responsible to track the day-to-day transactions.

• records only one side of transactions.

• must have a minimum of a high school diploma to qualify for the job. However, it is preferable to have at least an associate’s degree in accounting for adequate job preparation. Bookkeeping certificates and some job related experience is desirable from an employer’s point of view.

• earns a lower salary than an accountant. A bookkeeper’s median salary is $38,000.

• is likely to be on payroll for day to day duties.

 

The accountant…

• receives the bookkeeper’s records at the end of a quarter or year and generates financial statements from them.

• balances both sides of a transaction which includes the debits and credits.

• analyzes how to handle financial situations based on the principles and rules established by GAAP.

• has a minimum of a 4 year degree.

• is qualified to perform the bookkeeping functions.

• earns a higher salary than a bookkeeper. An entry level accountant’s median salary is $44,000. However, a Senior accountant may earn $64,000.

• may pass a rigorous exam to earn the title of Certified Public Accountant.

• is likely to be on retainer for the purpose of putting together quarterly reports or filing taxes at the end of the year.