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You may not mind balancing the books and handling financial transactions, and software like QuickBooks Online, FreshBooks and Xero can automate a significant amount of this work. But as your business expands, bringing on a bookkeeper can alleviate your workload and free up your time to devote to other areas of the business. Small business accounting is the process of tracking, recording, and analyzing your company’s financial transactions. Accounting is important for small businesses because you can gain insight into your company’s finances and forecasting with accurate data. You can use this information to make your business’s pricing, inventory, expenses, and growth decisions. You’ll need an accounting process to comply with your statutory business accounting requirements.

They must take 24 hours of continuing education each year to maintain their license. AIPB certification requires bookkeepers to have at least two years of full-time work experience and pass a national exam. To maintain the credential, bookkeepers are required to engage in continuing education.

How do the salaries of bookkeepers compare to those of accountants?

Although accounts receivable, accounts payable and payroll do impact your books, some of these tasks can be managed by a person in your company other than your bookkeeper. Others, like payroll, can be outsourced to independent companies that specialize in the task. Bookkeepers aren’t required to be certified to handle the books for their customers or employer but licensing is available. Both the American Institute of Professional Bookkeepers accounting and bookkeeping services (AIPB) and the National Association of Certified Public Bookkeepers (NACPB) offer accreditation and licensing to bookkeepers. Today, accounting delivers financial statements audited by accounting firms and is prepared following “generally accepted accounting principles (GAAP).” Accounting may not be necessary when applying for business financing, but the more prepared you are, the more likely a lender will be willing to lend to you.

• In bookkeeping, extra hours are typical during the busy tax season of January to mid-April.
• Bench offers full bookkeeping services by live bookkeepers, along with our always-available software platform (so you can log in any time to see where your accounts stand).
• Both certifications require candidates to have some experience in bookkeeping, demonstrate their knowledge by passing exams, and continue their education through professional development courses.
• A bookkeeper can perform basic accounting tasks, such as generating financial statements, but they might lack the expertise to analyze and interpret complex financial data.
• The financial statements prepared in accounting are a precise summary of financial transactions over an accounting period.

To choose accounting software, start by considering your budget and the extent of your business’s accounting needs. Bookkeeping, in the traditional sense, has been around as long as there has been commerce ― since around 2600 B.C. https://www.bookstime.com/ A bookkeeper’s job is to maintain complete records of all money that has come into and gone out of the business. If you want someone with a higher level of mastery in accounting, consider hiring a certified public accountant.

Bookkeeping vs. Accounting: What’s The Difference?

Both certifications require candidates to have some experience in bookkeeping, demonstrate their knowledge by passing exams, and continue their education through professional development courses. The most accepted definition of an audit is given as an evaluation of a personal organization, process, system, or business. The term is most ordinarily used with respect to audits in accounting,  and sometimes in project management, legal departments, and financial management also.

Other bookkeepers provide “full-charge” services and can even serve as a financial controller for your company. Your business’s accounting needs might not require the in-depth expertise of a hired professional. You might also be watching your company’s list of expenses and wondering where to reduce spending. In either case, consider handling the accounting yourself or delegating this responsibility to one or a few of your current employees. When interviewing for a CPA, look for an accountant who understands tax law and accounting software and has good communication skills. They should understand your industry and the unique needs and requirements of small businesses.

The roles: bookkeeper vs accountant

We’ve listed some of the key differences when it comes to the requirements and job market for each. However, having an accountant take on the bookkeeper’s role is usually an exception rather than the rule. They’re more interested in the big picture and don’t have the time or inclination to handle recording daily transactions or organizing financial documents. By recording financial transactions, bookkeepers track your finances so you can view at a glance how much money is entering and leaving your business.