Accountants and bookkeepers are an integral part of any organization. Unfortunately, many people believe that their roles are the same. In reality, accountants and bookkeepers have distinct duties. The distinction is also present when it comes to how they train for their respective jobs. Even the cost of hiring them is different. Here is an in-depth analysis of these differences. Understanding them will help you make the right choice when it comes to saving costs. 

– The Difference between a Bookkeeper and an Accountant

  1. Difference in Duties

A bookkeeper records the daily transactions of a business including purchases, payments, receipts, and sales among others. He uses various day-books to write down these transactions such as the supplier’s ledger, the general ledger, and the customer ledger. He has to record them accurately because they are critical when it comes to preparing a trial balance for the organization. 

In contrast, an accountant prepares the financial records of an organization. His work is vital because managers, tax authorities, shareholders, and investors rely on it to make their respective decisions on the company. It is important to note that an accountant uses the records prepared by a bookkeeper as his guide. For example, he will prepare an income statement for the organization using the trial balance and ledgers that the bookkeeper put together. 

  1. Differences in Training and Qualifications

The services provided by an accountant and a bookkeeper are critical to an organization. However, differences in training and qualifications exist. For example, bookkeepers can perform their duties even if they do not have a formal education. They also do not need any form of certification. However, a financial background in addition to specialized skills in computer software is an added advantage for bookkeepers who are seeking employment. 

In contrast, formal education is unavoidable if a person wants to be an accountant in Toronto. In most cases, a bachelor’s degree in accounting or business administration is necessary. It is important to note that certified accountants have a greater advantage than their uncertified counterparts do when it comes to securing job opportunities. More specifically, companies prefer hiring CPA holders when it comes to handling sensitive financial information. 

 

– The Specialized Duties Performed By Bookkeepers and Accountants

  1. Specialized Duties Performed By Bookkeepers

Bookkeepers prepare invoices before sending them to clients. They also record payments made by customers in addition to monitoring staggered payments. Moreover, bookkeepers record, and process invoices that suppliers send to the firm. Monitoring of changes in inventories is another specialized duty performed by bookkeepers. Lastly, these professionals process the firm’s payroll and they categorize daily expenses. 

  1. Specialized Duties Performed By Accountants

Accountants design and maintain financial statements including income statements. They also prepare financial forecasts and they use these forecasts to create budgets for the firm. Furthermore, accounts respond to financial queries from top management staff, investors, employees, shareholders, and relevant government agencies. They do so by preparing financial reports that address any issues raised by any of these stakeholders. Finally, accounts have to ensure that the business operates within the confines of the law when it comes to financial transparency and compliance with taxation laws. 

– Hiring a Bookkeeper Saves You A Lot of Money

These functions performed by bookkeepers and accountant are interdependent. More specifically, the accountant works well when the bookkeeper does his job perfectly. That means an accountant has to perform the functions of a bookkeeper if you do not have a bookkeeper. This kind of scenario would inflate your costs unnecessarily because accountants will charge you additional fees if they have to do a bookkeeper’s job. Remember, the hourly cost of hiring an accountant in Toronto is higher than that of hiring a bookkeeper. Consequently, you will lose a lot of money unnecessarily if you do not hire a bookkeeper. Hire one today so that you can save money tomorrow.