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Bookkeeper vs. Accountant-Why Your Small Business Needs Both

July 24, 2017 by Ed Becker

“Bookkeeping is designed to generate data about the activities of an organization,” said D’Arcy Becker, CPA and chairwoman of the Department of Accounting and Finance at the University of Wisconsin. “Accounting is designed to turn data into information.”

As a small business owner, you may or may not have a bookkeeper on staff. You may have one part-time or you may outsource your bookkeeping tasks to a professional bookkeeper, who is not an employee. Or you may not yet utilize a bookkeeper at all. Reviewing the roles of a bookkeeper vs. accountant and knowing what each is responsible for will help you understand why you should have both involved in your small business.


  •  Processes financial transactions
  •  Processes payroll and maintains the payroll system
  •  Prepares initial financial statements
  •  Reconciles accounts and prepares reports
  •  Manages accounts receivable and accounts payable
  • Calculates GST
  • Helps design, establish and review accounting systems


  • Advisory and analytical in nature
  • Analysis of past performance, to offer projections and advice
  • Tax advice and planning
  • Auditing
  • Corporate reporting and compliance
  • Financial management advice

A bookkeeper tracks, analyzes and records the daily financial aspects of your business. This can be done on a part time basis, it does not have to be completed daily. You do need to have systems in place that allows the bookkeeper to easily analyze the information to record the transactions. A bookkeeper  may also run reports and financial statements as needed. These tasks are necessary and must be current to give you and your accountant a snapshot of the business’s financial state.

An accountant then takes the information the bookkeeper has recorded, to analyze and advise. Accountants summarize, interpret, and communicate the latest financial transactions classified in the ledger account. They will also use historical financial data to look for trends and potential negative issues. They can analyze and advise for investments and new business ideas. They will put together the reports and information needed for bankers and loans, as well as your tax information, and some accountants are tax accountants and will prepare your returns.

Seeing the roles of bookkeeper and accountant as two separate and necessary partners of your small business team will ensure that your business’s finances are in good hands. Yes, it is possible to just have an accountant perform all the tasks as they are qualified to do so.  However, the cost would be higher as an accountant falls into a higher pay bracket than a bookkeeper. Having both creates a chain of command. The accountant manages the financial data and the bookkeeper is on the front line and keeps the daily tasks fulfilled, creates reports for the accountant, usually through the business owner, or to both directly. As your business grows, you might possibly even add more staff to your accounting team, such as data entry personnel, who would be supervised by the bookkeeper.

Keeping your financial team strong and accountable can also diminish the risk of fraud.  Having more than one person working on your books is a preventative action against fraud. These checks and balances are necessary to lessen the risk or theft and fraud which is very common. Having an accountant that oversees the bookkeeper maintains honesty and transparency. This also allows you more freedom and time to continue to work on the tasks that are important, like growing your business.

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