What Does Your Business Need – A Bookkeeper, or an Accountant?

What Does Your Business Need - A Bookkeeper, or an Accountant?

One of the most common questions we get asked is the difference between various industry titles such as bookkeeper and accountant.  Which one is right for you and your company? There are many resources out there that give some great definitions, but we wanted to define them as concisely as possible for your quick reference.  There are no hard and fast rules, as many of the terms are used interchangeably, but this is how our experts generally define them and how you can decide which your business needs:


You can think of a bookkeeper as a junior accountant of sorts.  You know all those receipts you have lying around?  A bookkeeper makes sure those are properly logged in your accounting software so you can manage your expenses and be more prepared come tax time.  Aside from data entry, bookkeepers often handle payroll, make bill payments, and handle sales invoices.  With a dedicated bookkeeper, you should have more insight into the status of finances at any given point allowing you to budget accurately.  While bookkeepers may be a small piece of the overall accounting puzzle, they really serve as the foundation.

Summary of a Bookkeeper’s primary responsibilities:

  • Log and categorize all transactions in the general ledger
  • Reconcile bank, credit card, and other account-level financials
  • Track money owed to you (accounts receivable)
  • Track money you owe (accounts payable)

When do you need a Bookkeeper?

If you feel overwhelmed doing payroll, chasing down invoices, or logging expenses, you can stand to benefit from having a bookkeeper.  Of course, that doesn’t mean you need one on staff.  A part-time bookkeeper can usually collaborate virtually once a month to get your books organized in a few hours, freeing you up to focus on core business needs.



While it’s not out of the ordinary for accountants to still update the books for more complicated entries (such as deferred revenue and accrued expenses), their role is less transactional than a bookkeeper’s and more interpretive.  For example, instead of noting that you have a $100,000 budget for this quarter, an accountant can help you decide when and what you should spend it on to realize tax breaks and other cost savings. Accountants also assist with quality checking and interpreting financial statements like income statements, balance sheets, and cash flows.  While a bookkeeper generates data, an accountant helps you understand and turn that data into action.

Summary of an Accountant’s responsibilities:

  • Verify and check the bookkeeper’s work
  • Enter complex journal entries (e.g., deferred revenue and accrued expenses)
  • Compile financial statements
  • Provide business owner with input on the impact of financial decisions
  • Assist with tax returns

When do you need an Accountant?

You almost certainly do not need an accountant in house.  We tend to agree with this article from entrepreneur.com that suggests a good time to hire a full-time accountant is when your business reaches 30 employees, but even then it may not be necessary .
To summarize, bookkeepers mainly log financial transactions and manage many of the logistics that keep your business running.  Accountants, meanwhile, use many of the entries created by bookkeepers to suggest the right course of action.  While bookkeepers are reactive, accountants are proactive.
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