Bookkeeper or CPA? Here’s What to Know.
Many small business owners consider hiring a professional to help them understand the financial responsibilities included when owning a business. For many individuals the terms “bookkeeper”, “Accountant”, and “CPA” are interchangeable. However, there is a difference between these positions.
The term “bookkeeper” is a literal one: A bookkeeper keeps your books in order and organizes documents for day to day transactions. Bookkeepers are often required to have between two and four years of experience or an associate’s degree. Many committed bookkeepers may also obtain certifications through professional organizations, such as “The National Association of Certified Public Bookkeepers”, by passing their training courses and tests on the knowledge and ethics of bookkeeping. They can also be certified in a particular software, such as QuickBooks, which can offer abundant advantages to their clients.
Bookkeeping is often comprised of:
- Processing payroll
- Entering and paying vendor bills
- Creating client invoices
- Processing sales orders
- Entry of day to day transactions, sometimes from multiple accounts
- Balancing, reconciling, and correctly managing accounts, ledgers, and records
- Verify all financial data is correct and complies with local, state, and federal laws and regulations
The complexity of a bookkeeping system will vary depending on the size of the business and the volume of transactions completed daily, weekly, and monthly. Given the evolution of software, numerous components of accounting procedures have been absorbed into the bookkeeping process. This means many smaller organizations are able to use bookkeepers for basic accounting and month-end closings, only truly consulting with their CPA for obtaining business loans or filing their tax returns each year.
A Certified Public Accountant, or CPA, is an accounting professional who has passed the Uniform Certified Public Accountant Examination and has met state certification and experience requirements. Individuals who have not met these requirements cannot legally use the title. CPA’S are authorized to take on more duties, obligations, and liabilities than a bookkeeper. While CPA’s are able to provide a range of financial services, it is common for a CPA to specialize in one specific area.
Certain CPA’s will commonly specialize in one of the following areas:
- Corporate Finance
- Corporate Business
- Estate Planning
- Financial Accounting
- Financial Analysis
- Financial Planning
- Forensic Accounting
- Income Tax
- Information Technology
- Management Consulting
- Performance Management
- Tax Preparation and Planning
- Venture Capital
In general, outsourced bookkeeping services are often more cost effective than in-house bookkeeping or a CPA. Through maintaining accurate records, a bookkeeper can save your business money in the long-term by reducing the amount of time a CPA will need to review documentation and data before they file your returns.
The Bottom Line?
Bookkeepers and CPA’s both play vital roles in your business. Not only are these professionals accustomed to working hand in hand, but if you already have a bookkeeper they can usually refer you to a CPA they’ve worked with and vice versa. A successful relationship between accounting professionals will significantly contribute to the long-term financial success of a business. Organized financial records, properly balanced finances, and accurate reporting are all key factors to overall success. Both professionals will be happy to take the burden of financial upkeep off of your shoulders, and allow you to focus on the parts of your business that you truly enjoy.
It’s Time to Start With the BOSS!
The BOSS team provides professional, responsive support for startups and small to medium businesses that need to outsource services including tax preparation, bookkeeping, sales tax processing, and payroll processing.
For more information, or to schedule your FREE 30 minute consultation, email email@example.com, or call us (Monday – Friday) at (910) 338-1198.
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