Bookkeeper vs Accountant (CPA)

bookkeeping tips business tips tax tips Aug 05, 2021
bookkeeper vs accountant (cpa)

You may have thought that a bookkeeper and an accountant are the same thing, don't worry, you are not alone in this. Our jobs overlap and that's what makes it a little hazy. But I am here to help you understand the difference and why it's important to have both.

 


NOTE: A CPA is a license that some accountants carry. So if you are wondering... what about a CPA... for the purpose of this blog, I will be referring to accountants in general. However, if you are in need of an accountant I do recommend you find one that has their CPA or EA license. 


 

A bookkeeper and an accountant are both vital to a businesses health. In a way, it's like the difference between a nurse and a doctor. You need both in order to survive. Their jobs overlap, however, they are two distinct people. 

 

The nurse is able to watch the overall health of the patient on a more consistent basis and be the first line of defense when a problem arises. But the doctor is ready to help when a more complicated problem arises. 

 

Like the nurse/doctor relationship... the bookkeeper is there to manage the day to day financial information of the business so that the CEO is able to understand exactly what is going on in there business in order to make decisions that will increase their profits

 

An accountant builds upon what the bookkeeper has done. They look at the financial data of the company, prepared by the bookkeeper, to create tax strategies and plans that makes sure the business owner isn't paying too much in taxes and that they are in good standing with the IRS. 

 Bookkeepers role:

  • Works on a daily, weekly or monthly basis (depending on the business)
  • Reconciling checking/savings/credit card accounts
  • Making sure the CEO/owner has a clear understand of the financial health of the business-this is important
  • Categorizes every single income & expenses transaction
  • Provides monthly financial statements and makes sure they are clear and accurate
  • Looks out for problems arising (first line of defense)

Accountants role: 

  • Works on a quarterly or yearly basis
  • Provides CEO/owner with a high level overview of the company
  • Works on creating and implementing tax strategies that will keep save the business more money
  • Is up to date on all the tax rules and regulations
  • Makes sure the company is in good standing with the IRS

 

Conclusion:

As you can tell, the roles can and should overlap. An accountant cannot do its job properly if the company doesn't have clean and accurate books.

As a bookkeeper, I am here to help create budgets, manage cash flow and provide the CEO/owner clear information on the financial health of their business. I work closely with my clients accountants to ensure the maximum benefit for their business. 

 

I always recommend my clients to have a good accountant (CPA or EA). If they don't have one, it's one of the first things we do when starting to work together. 

 

If you are not sure whether hiring a bookkeeper is the right fit for your business, as yourself these questions:

  • How does the numbers side of your business make you feel? anxious, stressed, and overwhelmed or empowered, excited, and confident
  • Do you spend hours each month trying to DIY your bookkeeping OR just ignore it until it's too late because you just don't have the time? 
  • Are you making financial decisions based off of what you think your numbers are?

That's where I come in. I help creative CEOs, like you become more confident, more profitable and way less stressed with my 1:1 bookkeeping services. 

 

Click here to get a quote today! 

 

ps. If you have more questions on the difference between a bookkeeper and an accountant, email me at [email protected]. I would love to help you understand the difference!