What is the difference between bookkeeping and accounting in the US?

The main difference between bookkeeping and accounting in the United States is that accountants are in charge of analyzing, interpreting, and advising clients about financial data that will help with decision-making. Accountants have the ability to prepare financial statements, such as balance sheets and income statements, adjust entries, file tax returns, summarize financial statements, and aid in short or long-term decision-making. A big responsibility that sets accountants apart from bookkeepers is that accountants have to be extremely knowledgeable and aware of financial decisions that will affect the company. Many companies, large and small, need to hire accountants to help advise, interpret, and analyze financial information to help the companies focus on other aspects of the business.

Woman writing about  the difference between bookkeeping and accounting

Accountant vs. bookkeepers: Roles and responsibilities

Most accountants have a Bachelor’s Degree in Accounting (Bachelor’s in Finance is adequate as well). Accountants in the United States must pass the Uniform Certified Public Accounting Exam to be given the title: Certified Public Accountant. Instead, bookkeepers are restricted to providing accurate financial reports while accountants also have limited decision-making power and are able to do taxes for US companies.

Accountant vs. tax preparer 

As mentioned above, accountants are professionals who offer interpretations and analyses of financial documents. The role of an accountant is broad and encompasses many topics such as audits, taxes, budgets, and financial statements. Accountants may choose to specialize in one such topic, so they may be more experienced in a particular field of accounting.

Although accountants do help with tax filing and planning, tax preparers help with filing and filling out general tax forms. Bookkeepers help record the files and transactions that occur, but the tax preparer is responsible for helping clients fill out paperwork and submit them to the Internal Revenue Service. The credentials of a tax preparer are not as extensive as an accountant’s CPA license. Tax preparers may also become Registered Agents, a state-authorized figure that helps businesses stay informed of their legal requirements.

There are different types of tax preparers, some who are non-credentialed preparers and others who are credentialed. Credentialed tax preparers may be accountants, although many accountants do not choose taxes as a particular route in their career, registered agents, or tax attorneys.

Two people doing bookkeeping

What is tax preparation?

Tax preparers can help complete and submit tax forms, but they will need sufficient knowledge of the state and country’s laws regarding taxes, as well as how corporate expenses can affect the amount of taxes business pay.

Tax preparers also deal with confidential and personal data given to them by clients such as home addresses, phone numbers, and social security numbers. Confidentiality is a big part of a tax preparer’s job. Tax preparers need to be insightful for future business activities and whether certain business decisions can result in tax deductions or credits in future tax payments.

How to get bookkeeping and accounting services for your company?

Globalfy has a team of certified professionals to help you with bookkeeping, accounting, and taxes. We specialize in e-commerce, tech, and digital companies.

US companies are not required to have a bookkeeping or accounting team, although it is helpful for them to be able to focus on growing the business while experts take care of the numbers. Globalfy is here to offer its support and expertise in bookkeeping, accounting, and taxes for companies that are looking to grow in the US market!

    Clare Martin
    8 Sep 2023 12:47pm

    I recently opened a furniture store in Latrobe, and since I'm not quite familiar with business tax yet, I wanted to seek help from a licensed accountant to assist me so that I don't make any costly errors. I appreciate your explanation when you told us that it's the role of an accountant to help companies with their tax filing and how to plan them properly using their knowledge in audits, taxes, and financial statements. I'll keep this in mind while I look for an accountant in Latrobe to hire for tax preparation soon. http://www.gibsonaccounting.com.au/

      11 Sep 2023 1:43pm

      Hi, Claire. How are you?
      We're glad to hear that our content was useful to you.
      If you need help with your company's bookkeeping, our experts can explain the services we offer:

      Best regards,
      Team Globalfy

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