What is the difference in a Bookkeeper, an Accountant and a Certified Public Accountant?

So, let’s clear up some confusion. What is the difference between a bookkeeper, an accountant and a Certified Public Accountant? (Kind of sounds like the beginning of a bad joke, doesn’t it?) Well, there’s nothing bad about any of those jobs. However, if you add a career in “finance” to the mix, then lines get a little blurry, right? Although they are all similar, they each have different responsibilities that work in tandem with each other.

Here, we will start at the beginning. In most businesses, bookkeepers or accounting clerks are responsible for the day-to-day transactions. This could include small family-owned businesses to larger corporations. Typically, there is a small difference in a bookkeeper’s and an accounting clerk’s responsibilities.

A bookkeeper usually is employed by a smaller company and manages all things related to accounting practices such as, accounts payable, accounts receivable and they record sales receipts, purchases and daily cash flow, in addition to, completing sales tax reports. Maintaining payroll, new employee records and balancing the monthly bank statement are typically duties of the bookkeeper, as well.

An accounting clerk, generally, works in larger businesses where specific jobs, for example, handling accounts payable is all they do. Other accounting clerks work in other aspects of the business, such as, accounts receivable or payroll. The same educational requirements are in place at this level, which is often just a high school education and some on-the-job training. Bookkeepers and accounting clerks earn about the same annual salary, about $39,240 per year, depending on experience.

Next up the corporate ladder you will find accountants. The preferred educational requirement for the accountant is an online Bachelor of Accounting degree. Their annual income is quite a jump up from the bookkeeper. An accountant can expect to learn about $49,357 per year. Duties may include reviewing the bookkeeper’s records, tax preparations and cost management. They regularly perform profit and loss reviews and compile reports for upper management.

Now, your next question may be, “How does an accountant differ from a Certified Public Accountant (CPA)?” The answer is simple. It’s a matter of receiving your license, however, that’s not as simple as it sounds. After you have completed your online Bachelor of Accounting degree program, generally, additional hours are needed to fulfill the requirements needed to qualify to sit for the CPA exam. These “extra” hours can be earned through a master’s degree program. Also, some states require a certain amount of work experience in public or non-public accounting to sit for the exam. You will need to check with your state for specific requirements.

To earn this prestigious designation, you must pass your CPA exam. The Certified Public Accountant exam is lengthy, difficult and in some states, can be pricey. The exam is divided into four sections and takes a total of fourteen to sixteen hours to complete, however, you can take each part at different times, but, it must be completed within eighteen months.

So, besides the additional hard work and passing the big test, why would an accountant put themselves through that? Perhaps for the love of numbers, but most likely, for the salary increase. CPA’s earn an additional ten to fifteen percent or more over those without the accolade and enjoy better job security. A CPA’s average salary is approximately $69,350 annually. Continued education is required to maintain your license, at lease forty hours per year.

CPA’s are employed by accounting firms or by larger companies and corporations. They can write audited financial statements, such as income statements and balance sheets; tasks that only a CPA can perform. The role of the CPA meets the high standards required in the world of accounting.

To summarize, day-to-day business operations are handled by bookkeepers, accountants and CPAs. In this manner, all of the transactions are considered “past transactions” or business that has already took place.

So, who looks into their “crystal ball” towards the future? Determines financial goals? Offers investment advice? That’s right… someone in the field of finance! A financial analyst earns an average of $84,300 annually, however, potential earnings can exceed $150,000 per year. Online Bachelor’s degrees in Finance programs are readily available, as well.

Which career is of interest to you? We have compiled a list of the Top 20 Online Accounting Degree Programs for your convenience.