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Understanding Roles: Bookkeeper vs Accountant vs CPA

Accounting nomenclatures often get thrown around like accountant, bookkeeper and CPA without an understanding for their true meaning and differences. As a business owner who has lots of solid business acumen, you may (or may not) understand the contrast between an bookkeeper vs accountant vs CPA. And, even if you do, you may not have a full grasp on what is needed for the optimization of your business. This easy-to-skim guide can get you up to speed on the lexicon and, more importantly, help you drill down on what would help your business thrive.

Your Accounting Vocabulary Lesson Begins Now

Let’s start with some simple definitions then unpack the relevant part – ways to determine what your business needs.

What is a bookkeeper?

Bookkeepers are typically responsible for the business’s accounts as they relate to the general ledger. They record all the day-to-day transactions of the business posting debits and credits. They may also produce financial statements and other reports to provide insights into the books. They reconcile the accounts, pay bills and receive payments from customers. They also produce financial statements and other reports for supervisors and managers. Bookkeepers prepare bank deposits by compiling data from cashiers, verifying receipts, and sending cash, checks, or other forms of payment to the bank. In addition, they may handle payroll, make purchases, prepare invoices, and keep track of overdue accounts.

What is an accountant?

An accountant is a professional who manages the financial aspects of your business at a higher level than the bookkeeper who takes on the tasks at hand. Your accountant prepares financial documents like profit-and-loss statements, balance sheets and more. They will perform routine audits of your books, prepare reports for tax purposes as well as provide financial information to help you minimize your tax liability and comply with regulations.

What is a CPA?

The CPA, or Certified Public Accountant, takes on the highest level of financial support for the organization. This highly-trained professional helps you plan and reach your financial goals. You can rest assured that your CPA has a deep knowledge of finance and accounting as the standards for becoming a CPA are stringent and to hold the CPA certification, CPAs must complete ongoing education. One major difference between a CPA and a non-certified accountant is that only CPAs can write an audited financial statement, such as a balance sheet or income statement. 

What does my business need? 

You may need a bookkeeper if…

You have many daily tasks that your team is battling to keep up with or lacks the skills to execute properly. Keeping the books up to date is critical as you optimize your business operations. Without well-kept and accurate books, you lose important insights into your business performance, could be at risk of non-compliance and could be wasting money.

You may need an accountant if…

You need someone to handle higher level financial needs for your organization. such as filing payroll reports, fielding questions from the IRS or preparing the books for tax deadlines. An accountant can help you with tax advice and tax planning, financial projections for the business’s future as well as provide oversight and recommendations regarding company spending. Your accountant can also review your books (as maintained by your bookkeeper), double-checking that all records are accurate.

You may need a CPA if…

At major milestones during your business’s tenure, you may require more than the day-to-day task fulfillment of the bookkeeper or the higher level consulting of your accountant, you may need to help of a CPA. The CPA can help you as you launch your business, deal with a complicated tax event (like an IRS audit) or during mergers, acquisitions or initial public offerings.

Navigating the terrain trying to understand the benefits of hiring a bookkeeper vs accountant vs CPA is not easy. We hope this guide helps get you closer to a solid knowledge base, but, of course, Agile Planners is standing by to consult you on your needs and help you match the numbers-pro to those needs. 

Agile Planners provides services for businesses, such as:

  • Outsourced Bookkeeping Services
  • Financial Technology and Process Consultation
  • Technology Integration Services
  • Technology and Process-improvement Training 

Agile Planners partners with your business to take on accounting tasks, integrate your technology systems and consult you on the best pathway toward success. When you are grappling with the choice between a bookkeeper vs accountant vs CPA, we can jump in to help you make the right decision for your business today and in the long-term.

Get Started With Agile Planners Today!

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