Bookkeeper, Accountant, or CPA? Who Does Your Business Need?

A bookkeeper can help you keep track of your daily transactions, an accountant can help you manage your finances, and a CPA can conduct an audit. In this article, you’ll learn about the differences between bookkeeper, accountant, and certified public accountant jobs.

CPAs, accountants, and bookkeepers are often used interchangeably. Is a bookkeeper sufficient, or do you need the help of all three? What’s the difference between an accountant, a bookkeeper, and a certified public accountant?

All three professionals can manage your finances and work toward a common goal, but the scope of their work is different. On the other hand, a bookkeeper is responsible for keeping track of all your financial transactions. A CPA, a certified accountant, would oversee your accounting functions.

What kind of accountant do you need for your business? We’ll find out.

The Bookkeeper

Bookkeeping is keeping a daily record of an organization’s financial transactions accurately, consistently, and systematically. To be a bookkeeper, you don’t need formal education or training; you need to be able to keep track of your business’s finances daily and bill customers for the goods and services you provide. Every day, bookkeeping services use specialized software to keep a running tally of all financial transactions. This would keep track of an organization’s incoming and outgoing cash flow.

The Accountant

There are many similarities between accounting and bookkeeping, and accountants perform many of the same tasks as bookkeepers. Accounting services, on the other hand, have a more analytical and complex job description. Analyze the financial data of an organization and provide financial guidance for the company’s growth.

They’d look at a company’s financial records and make projections and recommendations based on their findings. Their day-to-day responsibilities include the preparation of financial statements, the verification of compliance with standards, the detection of discrepancies in the accounting records, the creation of budgets, and the collaboration with auditors in the computation of tax liabilities.

A company’s accountant can provide several financial indicators that can be used to identify areas that require improvement and areas that yield profits. Accountants are required to turn Excel spreadsheet numbers into statements that can be used by a business to make better plans to achieve its goals. Accountants are frequently the go-to people for business executives who need help with budget forecasting, tax filing, or calculating tax liabilities.

The Certified Public Accountant (CPA)

CPAs are accountants who have passed the CPA exam and have a higher level of accounting expertise. For businesses and individuals who need help preparing and filing their tax returns, these resources are usually certified by a specific state. When the IRS conducts an audit, it is common for CPAs to be the first point of contact. A CPA’s day-to-day responsibilities include creating reports on transactions, updating records, conducting detailed audits, and representing clients before the Internal Revenue Service (IRS). People, businesses, and governments use CPAs because of their specialized financial reporting and auditing training. CPAs are better qualified and more trustworthy than accountants. Using them, companies can better manage their finances and reach the goals they set for themselves.

To help you decide who is best for you: bookkeepers, accountants, or CPAs

A few pointers to help you narrow down your options are as follows:

Assess the timeline you’ve set for yourself

Choose between starting a job right away or taking the time to further your education and training. You don’t need a lot of education to become a bookkeeper. An accounting degree, on the other hand, will open up more career options and advancement potential. You can increase your job prospects and income potential by studying for and passing the Certified Public Accountant (CPA) exam.

Determine your level of comfort with legal responsibility

Accountants, bookkeepers, and CPAs are all held accountable for the accuracy of the data they record and maintain. However, bookkeepers are the least liable because they do not handle audits or tax information. CPAs can work with materials subject to federal and state tax regulations and are all held to higher standards when taking sensitive financial information. You may be able to make a more informed decision about your career path if you are aware of the risks associated with each position.

A professional bookkeeper would have been better for handling your accounting and financial matters than you were planning to do yourself. Hiring an experienced bookkeeper can save you time and money by managing your payroll, reports, and account reconciliation. To maximize your reporting and figures, you need an accountant. An accountant is the best person to help you with your taxes and cash flow.

But accountants aren’t the best option if your business is complicated or you need to deal with the IRS and are looking for a more credible professional. You can hire a CPA if that is the case. You can come to ACCL Global for all of your accounting needs.