Nonprofit Bookkeeper vs. Accountant: What’s the Difference?

Tuesday, June 17, 2025

When your nonprofit was just starting out, your executive director likely handled most of your organization’s financial tasks. This means they were essentially a bookkeeper and accountant on top of all of their other duties. However, as your organization grew and more complex situations arose, having a separate bookkeeper and accountant became essential to ensure thorough and accurate financial management.

Bookkeepers and accountants work closely together, making it easy to confuse these two roles and their responsibilities. In this guide, we’ll clear up the confusion by covering the following topics:

• Nonprofit Financial Roles: an Overview
• Comparing the Nonprofit Bookkeeper vs. Accountant
• Hiring Nonprofit Bookkeepers and Accountants

Regardless of whether your bookkeeper and accountant are in-house staff members or outsourced professionals, you should know the difference between the two before you start recruiting. Let’s dive in with an overview of the different financial positions your nonprofit needs to fulfill and who you should task with each one.

Nonprofit Financial Roles: an Overview

Although this guide will primarily focus on bookkeepers and accountants, there are four financial positions that your nonprofit must fill. Each of these professionals has different responsibilities, so to help differentiate them, we’ll assign a unique keyword you can associate with their work.

Here is a quick breakdown of these nonprofit financial roles:

• Your nonprofit treasurer is the main financial expert on your board of directors, and the keyword to associate with their work is oversight. Their duties include approving your organization’s financial policies and planning documents, developing risk management strategies, and presenting recurring reports to the rest of the board.
• Your chief financial officer (CFO) is either a full-time member of your nonprofit’s leadership team or an external professional hired on a fractional basis to work closely with your leaders. They’re responsible for tasks like forecasting cash flows and managing grants. The keyword to associate with this role is strategy.
• Your nonprofit bookkeeper takes care of your organization’s day-to-day financial needs like tracking transactions, writing checks, and processing payroll. Their keyword is recordkeeping.
• Your nonprofit accountant is responsible for financial analysis at your organization. They take the information your bookkeeper records and draw actionable insights from it to improve your financial management practices. They also report your financial data in a variety of ways (more on this later!).

Although these professionals have distinct duties, they also collaborate often. For example, your CFO will typically take the lead on creating your organization’s annual operating budget because they’re in charge of strategic financial planning. However, to create this budget, they’ll rely on data recorded by your bookkeeper and analyzed by your accountant to predict the coming year’s revenue and expenses. Then, your treasurer has to sign off on the budget before it goes into effect.

Comparing the Nonprofit Bookkeeper vs. Accountant

Bookkeepers and accountants are both professionals below the executive level who collaborate closely, so their duties can be challenging to differentiate. We’ll break down their responsibilities to help you understand the difference between the two positions.

Nonprofit Bookkeeper

Bookkeepers don’t typically need any specialized education or certifications to do their jobs well, although they may find it helpful to have some basic training on how to use your accounting software. However, nonprofit finances operate differently from those of for-profit organizations. Therefore, to serve your nonprofit effectively, your bookkeeper should have enough baseline financial knowledge to track multiple revenue streams and funding restrictions.

Your bookkeeper’s main duties include:

• Entering basic data. Bookkeepers record all of your organization's key expenditures, income, and other financial data in an organized manner within your accounting software.
• Writing checks. For example, a bookkeeper will pay rent, utilities, vendor fees, and other basic expenses, either digitally or using traditional paper checks.
• Making deposits. Bookkeepers handle general bank transactions and record the basic information associated with them.
• Processing payroll. There is some overlap between nonprofit bookkeeping and human resources when it comes to payroll, but most small to mid-sized organizations assign this responsibility to their bookkeeper.
• Allocating costs. Although your accountant and CFO will handle most of your nonprofit’s expense allocation strategy, your bookkeeper needs to understand the general categories of functional expenses (program, administrative, and fundraising) to ensure that allocation goes smoothly in practice.

In general, a nonprofit bookkeeper is responsible for keeping records up-to-date and organized whenever funds change hands or new financial data is created. Bookkeeping, in essence, lays the foundation for the accounting processes that follow.

Nonprofit Accountant

Unlike bookkeepers, accountants are required to have at least a bachelor’s degree in accounting or a related field, and many also pursue more advanced degrees. They also need to pass a series of specialized exams to be considered a certified public accountant (CPA). This is because the analytical duties associated with accounting are much more complicated and require a deeper understanding of various financial topics than a bookkeeper’s.

At nonprofits like yours, accountants are typically responsible for:

• Reviewing all of your organization’s accounts. Accountants make sure everything in your nonprofit’s accounts looks correct in order to fully understand your financial situation and resolve any discrepancies that may arise.
• Balancing and reconciling transactions. In double-entry nonprofit accounting systems, bookkeepers typically record one side of a transaction at a time. Then, your accountant ensures the debit and credit values for various transactions are balanced and matches them to the information on your organization’s bank statements.
• Compiling financial statements. Nonprofits compile a standard set of financial reports each year, including the statements of activities, financial position, cash flows, and functional expenses. Your accountant will create and analyze each of these reports to draw conclusions about your organization’s financial health.
• Preparing for audits. If your nonprofit undergoes an independent financial audit for any reason, your accountant will help you choose the right auditor, compile all of the necessary documentation, and clean up your accounting system so it’s ready to go.
• Filing tax forms. Although your nonprofit is tax-exempt, you still need to file a federal tax return each year via IRS Form 990, as well as individual W-2s and 1099s for your organization’s employees and contractors, respectively. Your accountant ensures all of these forms are filled out correctly and submitted on time.
• Analyzing operating budgets. As mentioned above, your accountant analyzes the financial data that goes into your nonprofit’s annual operating budget and reviews the budget before it’s finalized.
• Maintaining compliance. To maintain transparent accounting practices, both for-profit and nonprofit organizations are expected to follow the Generally Accepted Accounting Principles (GAAP). Nonprofits are also subject to unique government regulations due to their tax-exempt status. As your accountant analyzes your nonprofit’s finances, they will ensure your organization follows all of these standards.

Essentially, accountants look at the data recorded by bookkeepers, analyze it, and develop recommendations to improve your organization’s financial management practices. This is why your nonprofit needs both a bookkeeper and an accountant. Accountants have the expertise to evaluate your finances that bookkeepers may not, while bookkeepers take financial data collection and tracking off your accountant’s plate so they can focus on higher-level tasks.

Learn more about your accountant’s responsibilities in our Beginner’s Guide to Nonprofit Accounting.

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Other Nonprofit Financial Roles

We briefly touched on two other financial management roles at your nonprofit: your treasurer and your CFO. Let’s take a closer look at each of these positions and how their responsibilities differ from those of your bookkeeper and accountant.

Treasurer

While your bookkeeper records your data and your accountant analyzes that information, your treasurer is responsible for overseeing financial activities and communicating pertinent information to your board. Though your treasurer is a member of your board, they often act as an intermediary between your board and staff, providing financial details to both groups.

Typically, a treasurer’s responsibilities include:

• Strategic planning. Your board is responsible for paving your nonprofit’s future direction, and the treasurer’s role is to provide financial guidance to ensure the goals in your nonprofit’s strategic plan align with your organization’s budget.
• Budgeting. Your bookkeeper, accountant, and treasurer will all play a role in setting your annual budget. However, budgets typically require board approval, and your treasurer should be able to answer fellow board members’ questions in detail so they can make an informed decision about signing off.
• Financial policy development. Treasurers’ main responsibility is oversight, and as such, they help create policies to guide your organization’s financial practices. For instance, they often set guidelines for gift acceptance, expense reimbursement, and compensation.
• Reporting. While your accountant analyzes your data to create reports, treasurers create their own separate monthly or annual reports to help other board members understand organizational cash balances, revenue, and expenses. These resorts are also used in conversations with prospective major donors to explain your nonprofit’s financial need.
• Audit preparation. Alongside your accountant, your treasurer will also play a role in assessing potential auditors and compiling necessary documents.
• Risk management. Nonprofit boards are generally responsible for managing risks and creating contingency plans. As such, your treasurer is tasked with identifying and resolving issues related to fraud, theft, and noncompliance.

Your treasurer needs two sets of skills to do their job well: financial knowledge and communication abilities. These skills allow them to present financial information to your board, answer questions, and provide guidance for financial planning.

CFO

Your nonprofit’s CFO is essentially the leader of your organization’s financial operations. They are responsible for crafting and overseeing your overall financial strategy. This means their work often intersects with your accountant and treasurer’s, taking on tasks related to financial planning and budgeting.

While large organizations often have a permanent CFO, small nonprofits often work with external agencies to hire fractional CFOs. Though CFOs are important, small organizations often have fewer responsibilities for their CFO, so fractional CFOs can provide affordable access to expertise on a part-time basis.

When hiring a fractional CFO, look for a firm that specializes in nonprofit finance, like Jitasa. Our team has years of experience working with a wide range of nonprofits, and we can bring those insights to help your nonprofit build strategic financial plans, create strong internal processes, and analyze your data to find key opportunities.

Hiring Nonprofit Bookkeepers and Accountants

How you recruit a bookkeeper and accountant depends on your nonprofit’s financial needs and hiring budget. Let’s look at the different options for working with these professionals and the steps for hiring them in more detail.

Types of Nonprofit Bookkeeping and Accounting Services

There are three main ways your nonprofit could work with a bookkeeper and accountant, each with its own advantages and disadvantages. You might also use one method to hire your bookkeeper and a different one to hire your accountant.

Here is an overview of the three types of nonprofit bookkeeping and accounting services:

• Hiring in-house. Large nonprofits with complicated bookkeeping and accounting needs often hire full-time professionals who can focus exclusively on their needs. In-house bookkeepers and accountants tend to be highly motivated and turn around projects quickly. However, hiring and onboarding new staff members is expensive. Additionally, if they make any mistakes in your financial reporting, your nonprofit will be held liable.
• In-kind donations. Small organizations that are just getting started with financial management may recruit a volunteer to do their bookkeeping and ask local accountants to contribute their services pro bono. This option is completely free and helps new nonprofits establish professional relationships. However, unpaid bookkeepers and accountants may have limited motivation and can choose to end their relationship with your organization at any time.
• Outsourcing to an accounting firm. Outsourcing balances long-term access to bookkeeping and accounting expertise with cost effectiveness. It still provides consistent professional relationships, and the firm you hire is liable for any mistakes, motivating them to produce high-quality work. The only drawback is that turnaround may take longer because firms often have many clients, although effective communication can help with this.

No matter which option your organization chooses, ensure your bookkeeper and accountant have experience working with nonprofit finances. Nonprofit bookkeeping and accounting are different from for-profit financial management in both purpose (ensuring transparency vs. maximizing profits) and practice. Your financial professionals need to understand these key differences to produce useful deliverables for your organization.

How to Hire a Bookkeeper or Accountant

Once you’ve chosen your hiring method(s) for your nonprofit bookkeeper and accountant, follow these steps:

1. Finalize your goals. Determine the top two or three responsibilities you need each of your financial professionals to fulfill so you can hire someone who is willing and able to complete those tasks.
2. Conduct online research. Look up nonprofit bookkeepers and accountants in your area, see what services they provide, and read reviews from past clients. Also, consider contacting other nonprofits in your network to see if they have recommendations.
3. Reach out to your top candidates. Narrow down your list based on your research, then arrange a meeting with each of your top picks to discuss your goals and determine whether they would be a good fit for your organization.
4. Make your final decision. Keep your budget in mind as you assess your top candidates, and establish a contract with your chosen partner before you start working together.

If you’re looking for an outsourced partner in nonprofit bookkeeping and accounting, Jitasa offers affordable, tailored services for both! Our team works exclusively with nonprofits and brings their years of experience to the table to fulfill your organization’s needs and achieve your financial goals.

Both a bookkeeper and an accountant are essential for your nonprofit to manage its finances. With a thorough understanding of each role, you can find the right fit when hiring, soliciting in-kind donations, or outsourcing your bookkeeping and accounting services.

For more information on nonprofit bookkeeping and accounting, check out these resources:

• What Is Fund Accounting? A Guide to Basics & Best Practices Learn more about fund accounting—the unique system nonprofits use to track their finances—to get a better idea of the expertise you’re looking for in a nonprofit bookkeeper and accountant.
• Nonprofit Chart of Accounts: How to Get Started + Example. Discover a key organizational resource that both your nonprofit bookkeeper and accountant will leverage in their work: the chart of accounts.
• Bookkeeping and Accounting Services Exclusively for Nonprofits. Explore Jitasa’s outsourced nonprofit bookkeeping and accounting services in more detail to see if they would be a good fit for your organization.

See how Jitasa’s affordable, tailored bookkeeping and accounting services can work for your nonprofit.

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