A lot of people who aren't "numbers people" group people who work with numbers and data into the same category. This post will explain the differences between an accountant and a bookkeeper so you can understand why your CPA should never be your bookkeeper (and vice-versa).
The best way to explain is to tell you what a bookkeeper does and what a CPA does:
The best way to explain is to tell you what a bookkeeper does and what a CPA does:
What a bookkeeper does
Let's start with the background of a bookkeeper. Many bookkeepers get started as data entry clerks, which is an entry-level position that doesn't require a college degree (in most companies). With experience, they can move into the role of bookkeeper, and eventually, if they want, they can obtain certification and/or higher education to move into an accounting role.
Let's start with the background of a bookkeeper. Many bookkeepers get started as data entry clerks, which is an entry-level position that doesn't require a college degree (in most companies). With experience, they can move into the role of bookkeeper, and eventually, if they want, they can obtain certification and/or higher education to move into an accounting role.
A bookkeeper's job is pretty literal, they keep the books by documenting transactions and keeping track of financial accounts. They can also be in charge of payroll, accounts receivables and other things your company may need. But just because they work with money doesn't mean your bookkeeper is qualified to be an accountant. In fact, bookkeepers are generally overseen by an accountant.
What a CPA does
Your CPA is an accountant who has graduated from at least a 4-year college or university and has obtained additional certification, hence the title Certified Public Accountant. Your accountant is qualified to do more than track your company's spending and financial accounts, which is why those tasks should be left to your bookkeeper.
Unlike your bookkeeper, who should be an employee since they are part of your day-to-day operations, your CPA is more of a consultant who can help you with strategic financial planning, taxes and analyzing the financial data your bookkeeper tracks.
When it comes to figuring out whether your small business needs a CPA or bookkeeper, it probably needs both. Hire a bookkeeper to be your "boots on the ground" and take care of your business's daily financial records, and work with a CPA as a consultant to tackle your larger financial goals and make sure your taxes are in order.
For help with bookkeeping, contact us today!
What a CPA does
Your CPA is an accountant who has graduated from at least a 4-year college or university and has obtained additional certification, hence the title Certified Public Accountant. Your accountant is qualified to do more than track your company's spending and financial accounts, which is why those tasks should be left to your bookkeeper.
Unlike your bookkeeper, who should be an employee since they are part of your day-to-day operations, your CPA is more of a consultant who can help you with strategic financial planning, taxes and analyzing the financial data your bookkeeper tracks.
When it comes to figuring out whether your small business needs a CPA or bookkeeper, it probably needs both. Hire a bookkeeper to be your "boots on the ground" and take care of your business's daily financial records, and work with a CPA as a consultant to tackle your larger financial goals and make sure your taxes are in order.
For help with bookkeeping, contact us today!
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