Bookkeeper vs. Accountant: What's the Difference?
Before you hire, understand what you actually need.
**Bookkeepers** handle day-to-day financial transactions: recording income and expenses, reconciling accounts, managing invoices, and maintaining accurate records.
**Accountants** analyze financial data, prepare tax returns, provide strategic advice, and handle complex financial planning.
Most growing businesses need a bookkeeper first. You can bring in an accountant quarterly or annually for strategic reviews and tax preparation.
Essential Skills for Your Bookkeeper
A great bookkeeper combines technical proficiency with meticulous attention to detail:
- Proficiency in accounting software (QuickBooks, Xero, FreshBooks)
- Understanding of accrual vs. cash basis accounting
- Experience with accounts payable and receivable
- Bank and credit card reconciliation expertise
- Basic understanding of payroll processing
- Familiarity with your industry's specific needs
How to Test Bookkeeping Skills
Don't just trust certifications—verify competence with practical tests.
Sample assignment:
Provide a month of messy transactions and ask them to: 1. Categorize all transactions appropriately 2. Identify any discrepancies or questions 3. Reconcile to a bank statement 4. Produce a simple P&L report
Pay attention to: accuracy, questions they ask, time to completion, and how they present their work.
Pro tip: A great bookkeeper asks clarifying questions. Someone who submits work without any questions likely made assumptions.
Communication & Reporting Expectations
Establish clear expectations upfront:
- **Weekly:** Transaction categorization complete, any questions flagged - **Monthly:** Reconciliations done, financial reports delivered by the 10th - **Quarterly:** Review meeting to discuss trends and anomalies
Define how they should communicate issues—don't let problems sit until month-end.
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