If you tend to lump accountants and bookkeepers into a single career, you’re not alone. Many people outside the occupation, and even those considering becoming an accountant or a bookkeeper, may be confused about what distinguishes one of these jobs from the other. Both roles are related to financial reporting. However, there are a lot of differences in terms of job responsibilities, industries of employment, education needed, income potential and growth rate.
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Accounting and Bookkeeping Job Duties
Both accountants and bookkeepers produce financial reports, but that doesn’t mean they do the same job. A bookkeeper is an in-house worker responsible for keeping records of transactions that add or detract from the company’s accounts or general ledger the United States Bureau of Labor Statistics (BLS). The financial reporting work they do is basic in nature, and their primary focus is the daily tracking of income and expenses.
Accountants, on the other hand, perform some big-picture analysis and interpretations of financial data, and the statements they prepare may be more complex or advanced. Accountants may specialize in preparing tax forms, auditing financial documents, filing quarterly or annual reports with the Securities and Exchange Commission (SEC) and consulting to improve business operations and profits, the BLS reported.
Having someone to oversee a firm’s daily financial reporting tasks is vital across many industries. The industries that employ the largest number of bookkeepers include professional, services, which accounts for 12 percent of the occupation overall; retail trade, which employs one in 10 accounting jobs; and wholesale trade, finance and insurance and healthcare and social assistance, each of which employ seven percent of the bookkeeping and accounting clerk workforce.
Among accountants, one in four works for the accounting, tax preparation, bookkeeping and payroll services industry, according to the BLS. Both the government entities and the finance and insurance industries employ about eight percent of all accountants and auditors. Another seven percent work for the industry of management companies and enterprises, and an additional seven percent are self-employed.
The BLS categorizes accounting as a business and financial occupation, while it considers bookkeeper to be an office and administrative support position.
Education for Accountants and Bookkeepers
The programs of study needed to work as an accountant vs. a bookkeeper may sound similar, but they’re quite different. Technically, no college degree is needed for a bookkeeping role, but rather just some amount of college education with no degree, the BLS reported. However, an associate’s degree in accounting is a popular choice for bookkeepers, accounting clerks, auditing clerks, payroll clerks and other financial paraprofessional roles. This type of two-year career-focused degree program tends to emphasize technical skills and practical application more than accounting concepts and theories.
On the other hand, it is unusual to find accountants who have no college degree. Generally, a master’s degree is the education needed to become an accountant or auditor, but some employers, as well as many senior-level and leadership roles, may prefer candidates with a master’s degree. As a student in a bachelor’s degree program in accounting, you will take coursework in both general business and accounting fields as well as your general education requirements. An internship can be a valuable part of an accounting degree program in that it exposes students to the work environment of a real accounting or business firm, aids in networking and allows students to gain experience alongside college credit.
Bookkeepers learn much of their professional knowledge from on-the-job training, while recruiters from accounting firms are likely to look for graduating students who already have a good deal of knowledge and internship experience.
Accountants’ and Bookkeepers’ Salary and Job Outlook
Due to the greater and more advanced scope of their work and the requirement for a four-year degree over a two-year one, it’s hardly a surprise that accountants earn more money than bookkeepers. However, you might be surprised at just how large that pay gap is. Bookkeepers earn a median wage of $39,240, a little above the $37,690 salary for all occupations, the BLS reported. For accountants and auditors, that median wage is $69,350 per year. It’s not unusual for senior accountants or those who rise to senior management roles to earn six-figure or near-six-figure wages.
Accountants also have a better job outlook than bookkeepers do. The BLS expects accounting jobs to grow at a faster than average rate of 10 percent over a decade, but it predicts that opportunities for bookkeepers will decrease by one percent over that same time period. One reason for this distinction is how technological change will affect these two related roles. Many tasks of bookkeepers have become automated, and in some situations, these professionals, or at least a portion of their job duties, can be replaced by efficient new computer software programs. Accountants aren’t seeing the same impact. While some of their more routine tasks can be automated, their knowledge of accounting concepts and theory and their ability to interpret financial reports to offer business advice or identify fraud continue to make their skillset valuable in spite of evolving technology.
There are benefits to both accounting and bookkeeping career paths. Accountants have better job prospects and earning potential, but they must devote more time, work and money into preparing for the career. Bookkeepers can get out into the workforce quickly and start earning a salary while their peers in a bachelor’s degree program are still in school, but their opportunities for raises and career advancement are limited. Which path is right for you depends on what you want out of your career and how much you are willing to invest in preparing for it.
Some bookkeepers go back to school and move up into accountant roles, so don’t feel limited by your initial career choice. This option can even save you money if your employer offers a tuition assistance benefit that can help you pay for advancing your education.