The difference between a bookkeeper, accountant and payroll service

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The world of business have many key players. You have the individuals you hear about in the news, like CEOs, Presidents, the Boards of the companies, however, you also have the individuals who focus on the small details, to help keep the company running smoothly, like the salespersons, accountants, janitorial staff and more. 

Whether it be the bookeepers, accountants, or payroll service provider, all three have drastically different functions that focus on details one would normally overlook. 

What are the differences between the three jobs? 

All three functions, as a bookkeeper, an accountant, and payroll service worker, focus on numbers and the details of the business. They work on organizing services, yet, they all differ in small ways. 

A bookkeeper is responsible for most, if not all, of the company’s assets and accounts, or the financial records of the business. They are tasked with keeping transactions, and income of the company organized. Bookkeepers also offer financial support and paperwork to supervisors and/or managers of the company they work for. The individuals will gather data and information from cashiers and use the data to prepare bank deposits through invoices and authenticating receipts. Most bookkeepers will also send cash and other forms of payments to and from banks. 

Some bookkeepers are also in charge of payroll, however, most focus on the organizational side of business. They also may make purchases, prepare invoices and monitor overdue accounts. 

Bookkeepers must be accredited aand licensed by the American Institue of Professional Bookkeepers (AIPB) and the National Association of Certified Public Bookkeepers (NACPB) in order to handle books for companies or clientele. 

In order to be certified by the AIPB, individuals are required to have 2 years or more of full-time experience in the industry, as well as pass the national exam offered. Bookkeepers must continue education in order to hold the certification afterwards. To be certified by the NACPB, individuals must pass a test designed for small businesses and their accounts. The test is designed to cover not only small business accounting, but also financial management, as well as payroll. 

An accountant, like a bookkeeper focuses on finances, but in a more detailed way. An accountant uses information gathered by the bookkeeper to analyze data, create reports based off of it, as well as offer audits to business owners. They also are responsible for:

  1. Completeing tax returns for the company, if needed.
  2. Providing income statements for employees.
  3. Gathering data and providing business trends to owners in a way to help improve the company through analyzation of the data gathered through the bookkeepers. 

Some accountants may also offer packages designed for areas that they see in need of improvement. In his book, Accounting for Dummies, John A. Tracy writes:

 “(They) step back and say, ‘We handle a lot of rebates, we handle a lot of coupons. How should we record these transactions? Do I record just the net amount of the sale, or do I record the gross sale amount, too?’ Once the accountant decides how to handle these transactions, the bookkeeper carries them out.”

The job of an accountant is to organize reports that not only directly impact the individuals of the company, but the company as a whole. Accountants offer an explanation of where one’s company stands financially, while defining what the statistics mean. They offer aid in the next steps, how to handle the business and what to expect when helping your business succeed. 

Accountants credentials differ due to experience, as well as licensing. One first must major and earn a bachelor’s degree in accounting. A certified public accountant (CPA) is a business professional that has passed the Uniform CPA exam, while meeting the requirements of the state they wish to practice in.

A payroll service provider is a third party company, usually housed within or a section of a marketing company that offers packages to ensure that employees are paid on time and in accordance with law. Payroll services also: 

  1. Monitor accuracy of employee hours, time and attendance, 
  2. Set up payment options for employees like direct deposit accounts, while also making the adjustments necessary. 
  3. Amalgamate third-parties such as 401(k) companies, as well as benefit plans like health insurance. 
  4. Aid in offering electronic payroll records to all parties within the company. 
  5. Verify and collaborate with all state and federal laws. 

They also collect data, as well as calculate net pay, and in some cases, withhold and pay taxes. Some payroll services also offer HR support services to clientele. Most companies that choose to partner with a third party like a payroll service provider do so in order to eliminate the need for in-house personnel. 

When choosing a payroll service provider, we recommend that you ask the following questions. 

  1. Does the company services companies that are similar to mine? 
  2. What are the features that are offered through the company? 
  3. What is their reputation? 
  4. Does the payroll service offer the ability to sync with the programs my company uses? 
  5. How often does the company educate its employees on laws and regulations? 
  6. Can the service integrate employee benefits with the system used? 

When choosing a payroll company, there are many factors to consider. Asking the right questions as well as knowing the questions to ask helps. Whether you need a bookkeeper, accountant or payroll service provider, knowing the differences and benefits of each can not only help ease the process but your decision. We recommend exploring your options after knowing what you need out of a provider. Wondering the route to go? Contact Kurv, Inc. and partner with the best in the industry, while saving time and money.