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What is the Difference Between a Bookkeeper and an Accountant? (and Why You Need Both) 

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This information was found on business.com, dated April 24, 2020.

Common bookkeeping tasks:

With proper standards and procedures in place, a trained bookkeeper can easily manage these simple, repetitive tasks:

• Preparing and sending invoices

• Recording payments from customers

• Monitoring late payments and sending payment reminders

• Recording, processing and paying invoices from suppliers

• Monitoring and recording inventory changes

• Processing petty cash transactions

• Categorizing credit card and other daily expenses

• Processing payroll

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Depending on the size of your business and the frequency of your bookkeeping needs, you might choose to handle basic bookkeeping tasks yourself, assign these tasks to an existing employee, contract with a third-party bookkeeping service or hire a full-time bookkeeper for your company. Some accounting firms also offer bookkeeping services at a separate rate.

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Specialized responsibilities for accountants:

These higher-level, more specialized tasks should be handled by a CPA (or by noncertified accountants with the careful oversight of a CPA):

• Creating and managing the chart of accounts

• Accruing and deferring revenue and expenses

• Designing and maintaining financial statements

• Building financial forecasts

• Creating a budget and comparing it to actual expenses

• Generating customized financial reports to address specific issues

• Determining estimated taxes and preparing tax documents

• Monitoring issues related to financial and tax compliance

• Identifying potential tax write-offs or other profit-maximizing opportunities

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Because these tasks, while important, tend to be relatively infrequent, most small and midsize businesses work with an outside CPA or accounting firm on a contract basis to meet their accounting needs.

The bottom line: Hiring a bookkeeper will save you money with your accountant

Too often, small businesses tend to leave bookkeeping tasks undone or poorly completed, forcing the business's CPA to spend their time catching up with these tasks before they can complete higher-level accounting duties. In fact, this issue is so widespread that many accounting firms maintain in-house bookkeepers to delegate these otherwise-unassigned tasks.

Particularly if you pay your accountant on an hourly basis, this can mean spending a lot more on administrative tasks that could be completed at a much lower cost.

To reduce costs while maximizing the effectiveness of your financial team, work with both a quality bookkeeper and a certified public accountant, make sure they are using the same standardized methods and best practices, and encourage them to communicate regularly. Understanding and properly delegating these roles will save you money and ultimately improve your bottom line.