The Top 5 Differences Between Bookkeepers and Accountants

When listening to people talk finances in a business setting, the terms bookkeeper and accountant are often used interchangeably. If you had to launch a quick pop quiz, most people wouldn’t immediately be able to name the differences between the roles of bookkeepers and accountants. Add CA’s and auditors to the mix and the puzzle becomes even more complex.

Both accounting and bookkeeping deal with financial data, require basic accounting knowledge, and classify and generate reports using the financial transactions. They also share common goals. However, the processes involved in their work are inherently different and have their own applications and sets of advantages. So, what are the major differences in their functions, and which one is suitable for the needs of your business? Let’s have a look.

The Top 5 Differences between Bookkeepers and Accountants

1. Definition

   Bookkeepers mainly focus on identifying, measuring, and recording financial transactions. Their function involves the recording of day-to-day transactions.

   Accountants focus on summarizing, interpreting, and communicating financial transactions which were classified in the ledger account. 

2. Objective

   The objective of a bookkeeper is to keep the records of all financial transactions up to date and systematic.

   The accountant’s objective is to gauge the financial situation and further communicate the information to the relevant authorities.

3. Decision Making

   Management decisions cannot be made based on the data provided by a bookkeeper.

   Management can make critical business decisions based on data provided by an accountant.

4. Financial Statements

   Financial statements are not prepared as part of the bookkeeping process.

   Financial statements are a key part of the accounting process.

5. Analysis

   The Bookkeeper’s process does not involve any analysis.

   The Accountant analyses bookkeeping information and interprets the data to compile it into reports.

It’s important to note that bookkeepers are required to work accurately and to be knowledgeable about financial topics. Bookkeepers will usually report to an accountant. Accountants, in turn, can obtain the title of Chartered Accountant through additional qualifications. A CA(SA) will be a certified member of an institution such as SAICA in South Africa and can hold a senior role in various financial services.

Which one does your business need?

This is really the bottom line. You are an owner of a small or medium business in South Africa and your finances need to be in order. You are concerned with issues of compliance and primarily, you want to know that you have a competent and knowledgeable person in control of your finances.

 With the evolution of technology and accounting software, bookkeeping has become increasingly absorbed into the accounting function and the lines have been somewhat blurred. The accountant can more easily perform the bookkeeping functions with the help of software, producing organised financial records and properly balanced finances. This of course contributes to the long-term financial success of the business.

When you choose to outsource this financial function, you give yourself the freedom to focus on the parts of your business that you really love. aXia Consulting provides business owners in Johannesburg the option of acquiring a comprehensive financial service. This allows you to invest in your business financials with a qualified, knowledgeable Chartered Accountant in control of the process – resulting in the stability and growth that you want.

Contact us today to enquire about financial services for your business. Phone 087 153 5200 or email admin@axiaconsulting.co.za.

Source:  flatworldsolutions.com