Accountants versus Bookkeepers

You undoubtedly have heard the terms "accountant" and "book­keeper" in many different contexts in your lifetime. Many people use these terms interchangeably. However, there are some general fundamental differences between the two roles. Accountant has a much broader meaning, whereas bookkeeper is focused mainly on transactional recording. What follows is a list of some of the roles each plays in an organization.

 

Bookkeeper

• Controls the source documents that come into the business

• Records detailed bookkeeping entries to account for the transactions of the business

• Prepares a trial balance at the end of every period to be reviewed by management

• Records the adjusting journal entries prepared at the end of every period, such as depreciation, asset reserves, and bad debts

Accountant

May perform all the above duties, plus the following:

• Reviews detailed bookkeeping transactions and summaries to detect errors or omissions

• Presents and interprets summary financial information for senior management

• Designs the internal control processes of the company to assist in day-to-day operations and to prevent fraud

• Projects the future growth of the business

• Provides explanations for differences between the actual performance of the business and projections

If you are a one-person show in your small business, these distinctions don't matter. You are both the accountant and the book­keeper, as well as manager, salesperson, credit department, marketing department, and chief bottle washer!