Bookkeeping vs Accounting: What’s the Difference?

bookkeeper vs accountant salary

In most cases, employers want to hire someone with a bachelor’s degree, and a master’s degree may help boost your earnings. Bookkeepers also post transactions using journal entries that track all account activities. Know you’re set up right with help from a QuickBooks expert who can help you connect your banks and credit cards, and learn best practices to use QuickBooks with confidence. Industry newcomers tend to use the terms “bookkeeper” and “accountant” interchangeably, but there are a few important distinctions between the two. The top three skills for a Bookkeeper include Payroll Tax Returns, Customer Service and Reconciliations. Most important skills for a Staff Accountant are Reconciliations, Account Reconciliations and GAAP.

The distinctions between accounting and bookkeeping are subtle yet essential. The two careers are similar, and accountants and bookkeepers often work side by side. However, significant differences exist, like work conducted in each career and needed to be successful.

Is Bookkeeping Certification Worth It? Salary And Job Growth

For example, accountants could earn a college-level certificate in financial planning if they were interested in long-term investment and financial strategy. For small businesses, adept cash management is a critical aspect of survival and growth, so it’s wise to work with a financial professional from the start. If you prefer to go it alone, consider starting out with accounting software and keeping your books meticulously up to date. That way, should you need to hire a professional down the line, they will have visibility into the complete financial history of your business. All small-business owners should consider hiring a professional accountant to handle their tax returns, at the least. When it comes to bookkeeping, some business owners choose to manage those tasks themselves.

bookkeeper vs accountant salary

As a result, certification can lead to advancement opportunities in other areas of accounting, as well as finance and management positions. Payscale bookkeeper salary data from September 2022 indicates steady pay increases as their careers advance. These increases peak as a bookkeeper moves from entry-level roles into the mid-career stage. Though their practices generally differ, they may intersect at some points, causing confusion on what specialist could be the best fit for a business. So before you start looking through accountants or bookkeepers to hire, a good rule of thumb is to carefully analyze your business needs and available resources.

How To Become a Bookkeeper in 3…

Of course, a background in accounting practices will help you ride out a learning curve as a new bookkeeper. A bookkeeper usually performs these steps, however, an accountant may step in to complete these tasks, or oversee them as they’re completed by the bookkeeper. Students with eligible credits and relevant experience on average saved $11k and 1 year off their undergraduate degree with University of Phoenix. Accountants will either quote a client a fixed price for a specific service or charge a general hourly rate. Basic services could cost as little as $20 an hour while advanced services could be $100 or more an hour. They’re in charge of balancing the books, which means carefully recording and monitoring assets, liabilities, and equity.

To see how technology can ease the management of your business finances, book office hours with our team. When a bookkeeper wants to leap to being an accountant, they will need to take the CPA exam, plus earn a bachelor’s degree (most of the time), if they do not have one already. Fifty states plus the District of Columbia require accountants to earn 150 credit hours of college education before taking the national four-part Uniform CPA exam.

What is the difference between a bookkeeper and an accountant?

The process of maintaining certification can help you keep your skills sharp over time as well. To renew your certification, you must complete continuing coursework, attend bookkeeper vs accountant salary professional development programs and take part in training workshops. While these requirements may sound tedious, they could benefit your career in the long term.

One of the most attractive aspects of bookkeeping and accounting careers is that companies in almost every industry rely on specialists in these fields. Enterprises and medium-size companies often have in-house accountants and bookkeepers. People tend to use the terms accounting and bookkeeping interchangeably; however, the two roles require different skills and qualifications. Bookkeepers do not have the training or certifications to work as accountants, and accountants do not usually have the experience or software knowledge to function as bookkeepers. A bookkeeper maintains the financial records of business transactions on a daily basis. Bookkeepers are essentially keeping track of all the money that comes in and goes out of the business.

With all of this information pulled together in financial statements and reports, an accountant can provide business owners with sound financial advice. This includes where your business stands financially, what that means for your business, what you should do about it if anything, and where your business should go from here. Other small businesses hire a bookkeeper or employ a small accounting department with data entry clerks reporting to the bookkeeper.

  • All these career paths often start with the same type of education, with many accountants pursuing a Bachelor of Science in Accounting degree.
  • For example, a certification from California State University, Fullerton costs $2,195.
  • If you’re considering purchasing new equipment or taking out a line of credit, for example, your accountant can help you determine the financial ramifications your decision can have.
  • Bookkeepers are essentially keeping track of all the money that comes in and goes out of the business.

Both accounting and bookkeeping jobs are ideal if you like to work with figures or are interested in finance. Over the same period, the demand for accountants is projected to grow by 6%. The same advances and automation will also affect the accounting industry. Accountants will remain in demand because they can generally offer insights that a computer cannot match. In addition, the globalization of commerce, new and more complex tax laws, and expanding technologies may lead to new opportunities for accountants. According to BLS, the annual wage range for this profession in May 2021 was $47,970 to $128,970.

Bookkeeper Pay Difference by Location

If your business already has a bookkeeper, but you begin to struggle with legal financial questions, it might be time to hire an accountant. But if you work in a very tax-specific area, you might think of hiring both professionals for accounting and bookkeeping needs. If you are interested in becoming an accountant, it may be beneficial to your career to become a certified public accountant (CPA), which has its own exam.

They also prepare tax returns and find ways to cut costs and increase profits. As a reflection of their increased responsibilities, accountants earn significantly more than bookkeepers on average. Similar to what bookkeepers and accountants charge an hour, their salary is based on different factors as well. Salaries are typically based on education, certification, years of experience, credentials, industry or employer, job description, location, and complexity of work. Bureau of Labor Statistics for 2021, the national average salary for bookkeepers was $45,560 and for accountants was $77,250.

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