Bookkeepers and accountants are instrumental in maintaining the financial function, structure and health of businesses and organizations across all industries. Although the two professions do have overlapping job responsibilities, there are key distinctions between bookkeeping vs. accounting.
This article overviews the job qualifications, duties and benefits of each role.
What Is Bookkeeping?
Bookkeeping is the systematic tracking, recording and organizing of daily financial transactions for businesses, companies or organizations. Proper, meticulous bookkeeping allows organizations to track and accurately interpret critical information. This helps inform businesses’ decisions regarding operations, investments and other financial matters.
Bookkeeping Job Qualifications
Generally, bookkeepers have a mix of formal education, professional work experience and certifications. These professionals typically hold at least a bachelor’s degree in accounting, economics, mathematics, business or a closely related field. However, some employers require job candidates to have only a high school diploma or the equivalent to qualify for entry-level positions.
Bookkeeping Certifications
The most popular organizations administering bookkeeping certifications are the National Association of Certified Public Bookkeepers (NACPB) and the American Institute of Professional Bookkeepers (AIPB). But is bookkeeping certification worth it?
Certifications can help establish bookkeepers’ credibility, demonstrate their commitment to the profession and validate their bookkeeping knowledge and skills. The professional designation can help expand job opportunities and increase earning potential.
NACPB: Certified Public Bookkeeper
NACPB actually describes the Certified Public Bookkeeper (CPB) designation as a license, not a certification. The entity does offer a bookkeeping certification, but this credential is only a fraction of what the CPB designation has to offer. The CPB credential, on the other hand, is more comprehensive and among the most popular professional designations for bookkeepers to earn.
CPBs must meet these requirements:
- Complete the bookkeeping, payroll, QuickBooks and accounting certifications through NACPB.
- Have one year of bookkeeping experience.
- Agree to the CPB professional code of conduct.
Candidates have to apply to become CPBs and pass an exam. To maintain certification, CPBs must complete 24 hours of continuing education each year.
AIPB: Certified Bookkeeper
AIPB offers a preparatory program for its Certified Bookkeeper (CB) exam. This program and the exam cover the following topics.
- Adjusting entries
- Correcting accounting errors
- Depreciation
- Internal controls and fraud prevention
- Inventory
- Payroll
Candidates should have at least two years of full-time professional bookkeeping experience. Alternatively, they may show evidence of 3,000 hours of freelance or part-time bookkeeping work. CBs can complete this experience up to three years after passing the exam.
Bookkeeping Job Responsibilities
Bookkeepers oversee a variety of clerical and administrative tasks, including the following.
- Recording day-to-day financial transactions, debits and credits
- Updating the general ledger regularly
- Processing accounts payable and receivable
- Reconciling entries into an accounting system
- Producing financial statements
- Preparing taxes
- Assessing business performance
- Payroll
- Maintaining accurate records
Benefits of Working as a Bookkeeper
Bookkeeping offers excellent job prospects, high earning potential and flexible working hours. Below you’ll find just a few benefits of working as a bookkeeper.
Career Advancement
Bookkeeping works well as a stepping stone for professionals looking to gain hands-on experience and advance their careers in accounting. With relevant experience, continued education and certifications, you can qualify for higher-level accounting positions.
Self-Employment and Freelance Opportunities
Many companies and organizations outsource financial support, which includes bookkeepers. If self-employment appeals to you, bookkeeping offers flexibility in determining a work schedule and building a clientele that suits you.
Transferable Skills
Bookkeeping can equip you with valuable accounting skills, along with experience with a general ledger, accounts payable, data entry, spreadsheets, invoicing and accounting software. You’ll also gain knowledge of regulatory standards and standard principles and practices of accounting.
As a financial support function, bookkeeping can necessitate collaboration with professionals in other departments or industries, providing you with desirable knowledge of general business operations.
What Is Accounting?
Accounting is a process that entails recording, summarizing and reporting critical financial information. It comprises two main parts: bookkeeping and analysis. Accountants are essential in helping businesses and organizations make sense of their financial data, extracting valuable insight from that data and keeping them compliant with stringent financial regulations.
Types of Accountants
Accountants work in various settings across nearly every industry. The most common types of accountants include the following.
- Public accountants
- Private accountants
- Government accountants
- Managerial accountants
- Forensic accountants
- Fiduciary accountants
Accounting Job Qualifications
To become an accountant, you must hold a bachelor’s degree from an accredited college or university. An accounting degree is preferred, though degrees in closely related fields, such as finance or business, are often accepted by employers.
Depending on your state, employer and position, you may also need specific licenses and certifications to work as an accountant. Note that each professional designation may set its own educational and professional experience requirements.
For example, the Certified Public Accountant (CPA) credential mandates 150 semester hours of education, which goes beyond the credits involved in a typical bachelor’s degree. CPAs often earn master’s degrees to fulfill this education requirement.
Accounting Certifications
Earning accounting certifications can expand your job opportunities, increase your earning potential and help with career advancement. Below we describe a few of the most popular accounting certifications and their requirements. Note that these are just a handful of the certifications available to accountants.
CPA
The American Institute of Certified Professional Accountants (AICPA®) administers this credential. The exact CPA requirements for licensure vary among states. However, all prospective CPAs must complete at least 150 semester hours of education and pass the Uniform CPA Exam.
Certified Financial Analyst (CFA)
The CFA Institute provides this designation. To become a CFA, you must complete the following steps.
- Pass three exams via the CFA program.
- Complete work experience requirements. You may do this before, during or after completing the CFA program.
- Submit two to three professional reference letters.
- Apply to become a CFA.
Certified Management Accountant
You can become a Certified Management Accountant (CMA)® through the Institute of Management Accountants (IMA)®. The CMA exam comprises two parts: strategic financial management and financial planning, performance and analytics. Each part breaks down into six competencies.
All CMAs must be IMA members. They must also meet the following requirements.
- Pay an entrance fee.
- Have an accredited bachelor’s degree or hold an IMA-approved certification.
- Complete two years of continuous experience in financial management or management accounting (or both).
- Pass the CMA exam.
Accounting Job Responsibilities
An accountant’s day-to-day responsibilities may vary depending on their position and organization. Common accounting tasks include the following:
- Collecting, analyzing and reporting financial data
- Reconciling accounts payable and receivable
- Managing profit-and-loss statements and balance sheets
- Computing taxes and preparing tax returns
- Preparing budgets, financial forecasts and risk analysis assessments
- Performing audits and resolving discrepancies
- Maintaining accurate financial records
- Advising on reducing costs, increasing revenue and maximizing profits
- Evaluating financial operations to recommend best practices, identify issues and strategize solutions to increase operating efficiency
- Complying with all organizational, local, state and federal financial and accounting laws and regulations
Benefits of Working as an Accountant
Pursuing an accounting degree comes with several advantages, ranging from job security to opportunities for entrepreneurial pursuits. Accounting degree-holders also enjoy a variety of career options and the chance to work in different industries. Below we explore just a few benefits of working as an accountant.
Steady Demand
Accountants play pivotal roles in tracking and organizing the finances of a business. There’s a consistent demand for accountants, and the Bureau of Labor Statistics (BLS) projects employment for accountants to grow by 6% from 2021 to 2031.
Moreover, these professionals are needed across industries, which allows them to work in diverse work environments and settings.
Career Advancement
With a combination of professional experience, continuing education and certification, accountants can open up opportunities for career advancement in the field. Below we list a few job titles for accountants at different levels in their careers.
Junior accounting positions.
- Junior accountant
- Budget analyst
- Financial analyst
- Accounts payable/receivable specialist
Mid-level accounting positions.
- Accounting manager
- Finance manager
- Cost accountant
- Accounting analyst
Senior-level accounting positions.
- Chief financial officer
- Controller
- Director of finance
- Senior accountant
Financial Literacy
Through their studies, professional working experience and certification processes, accountants gain finance and business knowledge that can apply across various professions and industries. Transferable accounting skills include tax law, spreadsheet analysis, management, banking and finance, micro- and macroeconomics, corporate finance and leadership.
Competitive Pay
The pay range for accounting professionals is often competitive. The BLS reports that the median annual salary for accountants is $77,250 per year. Several factors can impact accountants’ earning potential, including location, level of education, work experience and certifications.
Entrepreneurship Opportunities
If running your own business appeals to you, accounting offers opportunities for self-employment. With the right amount of experience and networking, CPAs can provide various financial services, including tax accounting, auditing and consulting.
Which Path is Right for You?
Accountants and bookkeepers share common goals but support businesses and organizations at different phases of the financial cycle. If you’re questioning which position is right for you, it’s important to consider your interests, qualifications and career goals. Bookkeeping can also serve as a stepping stone in your accounting career.
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