When exploring the careers within accounting, it’s easy to get lost in the various titles and requirements. While it may seem that an accountant and bookkeeper perform the same tasks, the differentiation between the two careers is vast. From education to basic job requirements, bookkeeping and accounting are two very different careers within the same field.
A bookkeeper requires minimal education. Some bookkeepers may only possess a high school diploma and receive all their training on the job. Others may have an associate’s or bachelor’s.
An accountant requires a bachelor’s degree in accounting. Most accountants advance their skills further by obtaining a Master’s Degree of Business Administration (MBA) or becoming a Certified Public Accountant (CPA).
The easiest way to compare a bookkeeper and accountant is to think of them as in the army. A bookkeeper is the front line soldier. They are in the trenches performing daily tasks such as payroll, preparing daily financial reports, recording company transactions, and checking company financial records for accuracy.
Accountants are the generals. They prepare high complexity reports that can show a business what direction will be most profitable. While a bookkeeper may identify a problem within the accounts, an accountant has the education and experience to determine exactly what is causing the problem and how best to resolve it.
The US Bureau of Labor Statistics (BLS) expects the number of jobs in accounting and bookkeeping to rise with the national average. The recent financial crisis may be good news for accountants and bookkeepers. Companies are putting an emphasis on accurate and meaningful data from their accounting departments and are hiring more employees.
Compensation in the accounting field is on par with other fields where more education leads to larger paychecks. Bookkeepers, according to the BLS, have a median pay of $34,040 per year while accountants make $61,690 annually. The extra education and greater job responsibilities of an accountant make it a much more lucrative career but requires greater education and upfront cost.
Bookkeepers can find jobs in business big and small. Any business that runs a payroll and ledger needs a bookkeeper to keep all their company information in order. Many small companies start with the owner keeping the books but as business grows, they require a separate employee to oversee day to day finances.
Accountants can find jobs in larger companies. An accountant’s ability to spot problems in company financial records and resolve that issue make them indispensible in large firms but unnecessary in smaller businesses. Some accountants choose to work freelance and come into small businesses where a bookkeeper has noted an issue, resolve that issue, and then move to another company. In larger companies where full time accountants are needed, accountants may act as managerial staff over bookkeepers.
Ultimately, bookkeeping is a small portion of the giant field of accounting. While an accountant may take a job as a bookkeeper, accountants have wide and varied skillset that they can apply to many parts of a business, not just the day to day operating expenses. Bookkeepers provide a vital service to businesses by churning through the daily finances and presenting balanced ledgers and useful data.