An often-asked question: “What’s the difference between a bookkeeper and an Accountant?”
Often used interchangeably, there is a difference in the primary roles of bookkeeper and accountants that business owners should understand.
Bookkeeping dates back to the late 1400’s when the double-entry bookkeeping system fort racking business transactions, codified by Luca Pacioli in 1494 in his book Summa de Arithmetica, Geometria and Proportioni et Porportionalita was published. The system provides the techniques for which businesses can follow transactions, generate statements of the organization and gain financial understanding. Arguably the best place to glean a better understanding and to differentiate these roles you can still purchase his treatise on Amazon today. For those of you not as interested in history and bookkeeping as I am, the short answer is one ‘keeps the books’ and the other ‘interprets them’.
The bookkeeper is responsible for the accurate and timely recording of the day-to-day transactions and activities of the business; purchases, sales, receipts, and payments. Bookkeepers process the data of business. They ‘code’. The live in the details of your business. Bookkeepers deal with the day-to-day head on.
Accountants on the other hand are big picture people. They verify the data and turn data into information and reports which they analyze. Financial statements tell a story that an accountant can read, understand and interpret to inform business owners of margins, trends, forecasts, cash flow and growth opportunities.
Both bookkeeper and accountant are concerned about the accuracy of the data and use various processes to check for errors and validate the data.
With today’s technology, the roles are changing as automation enhances the day to day tasks of keeping the books. Automation relieves the bookkeeper of some of the mundane task of data entry into the accounting system and at the same time enhances coding of data for greater efficiency and fewer errors. Integration of various systems makes this data available across multiple platforms providing business owners and their bookkeeper and accountant reports at their fingertips in real time. Valuable information to any business owner.