Bookkeeper vs. Accountant?

I am frequently asked by people in general: what is the difference between a bookkeeper and accountant? I mean, they both work on books and do "accounting", right? So? What *is* the difference between an accountant and a bookkeeper. Actually, lets first address the similarities. Both should know about Generally Accepted Accounting Principles (GAAP), and have formal training in accounting. Accountants normally have a minimum of a Bachelor's Degree, usually in Commerce with an Accounting focus, or in Accounting Science, depending on the university. Many will have a professional designation. In North America that is: in Canada a Chartered Accountant (CA), Certified General Accountant (CGA), Certified Management Accountant (CMA). Now all of the designations have merged and we had Chartered Professional Accountants (CPA). In the USA a Certified Professional Accountant (CPA). Some bookkeepers have a degree, some have community college diplomas or certificates. Both should have had some hands-on experience doing bookkeeping or accounting work - bookkeepers are frequently taught on the job, whereas accountants article at an accounting firm once they have received their degree, satisfied their professional association's course requirements and passed the association's professional examinations. Some might say that bookkeepers don't do tax returns, but I know many bookkeepers who prepare not only personal tax returns, but also returns for sole proprietors, partnerships and even corporations! In my opinion, the most important differences are big-picture versus detail oriented and tax expert versus recordkeeping expert. Accountants do, during the course of their training, have to cover basic accounting, which amounts to bookkeeping. However, the greatest emphasis on an accountant's education is on tax law, preparing tax returns, tax planning, and adjusting the books to differences in accounting records and allowable amounts for tax purposes. Sometimes there are differences, and the bigger the business, the more likely this will happen. It is all about what affects the bottom line, because this is what the business owner pays tax on. The big picture. The whole enchilada. Bookkeepers are details people. They look at how each item affects the bottom line, and make sure that everything is recorded to the right category, that everything is GAAP compliant if it needs to be (not all books need to be, but it is nice!), and that all transactions are tax compliant - will this pass audit? Keep in mind, this is not to say that accountants are not details people, and that bookkeepers are incapable of seeing the big picture. Some are capable of both, and all need to be at times in order to do their jobs. Remember the old adage, the right tool for the job? Well, getting your accountant to do your bookkeeping is kind of like using a sledgehammer to drive a drywall screw. It can be costly. Accountant's fees are generally in the hundreds of dollars per hour. Do you want to pay $200 an hour or more for your bookkeeping? That's throwing your money out the window. Hiring a bookkeeper, or using a service or freelancer, is a much more cost effective means to get your bookkeeping done, keep everything up to date and make sure the government gets its reporting on time for things like payroll and sales taxes. Having a separate accountant and bookkeeper also means there is another set of eyes (or possibly more than one) checking over the bookkeeper's work. Here is an example of making sure an error isn't missed because of not seeing the forest for the trees.