The Difference Between Accountants, CPAs and Bookkeepers

What makes accountants, bookkeepers, and CPAs different?  And who should you hire?

People often use these three terms the same way. But they are not the same. It’s important to know the difference so you can make better business decisions.

Finding the right financial expert for your new business will help it grow and stay healthy.  Here’s how to choose the right professional for your business’s financial health.

Here’s how to choose the right professional for your business’s financial health.

What is a Bookkeeper?

A bookkeeper is in charge of your financial information. The word “bookkeeper” means just what it says. A bookkeeper is the keeper of your books.  They write down every transaction that happens every day. They post debits and credits. They make invoices. They do payroll. They know how to use accounting software like Quickbooks and Xero.

Should you get a bookkeeper?  A lot of business owners keep track of their own books. But if you find this task to be too time-consuming, hard, or tiring, you should hire a bookkeeper. You can hire one as an employee, or you can use the services of an accounting firm.

Bookkeepers don’t need a degree or other credentials, but they may be licensed by the AIPB or NACPB. Most of the time, bookkeepers charge less than accountants.

What is an Accountant?

An accountant takes care of your business’s financial health. Your accountant keeps an eye on all the “vitals” of your finances. And they give you useful tips on how to keep your finances in good shape. They can also figure out where problems are and suggest ways to fix them.

Accountants can do everything that bookkeepers do, like enter transactions, write invoices, and manage payroll. They also look for trends and patterns in data, run reports, and make statements and tax returns.

Should you get an accountant?  An accountant is very helpful if your business is growing or if you want it to grow. They let you focus on what’s most important to you. While also being a trusted partner and advisor.

Accountants will normally have a bachelor’s degree from a college or university. To become a certified public accountant, they may also take the Uniform CPA exam. Accountants charge more than bookkeepers, and if they get a CPA title, they can charge even more.

What is a CPA (Certified Public Accountant)?

A CPA is an expert accountant that specializes in business growth and fixing financial problems. CPAs must pass a special exam and keep learning throughout their careers to keep their title. They can do forensic accounting. If you are audited by the IRS, they will represent you. They can also audit your business on their own. Their careful look at your finances can give you important information.

Should you get a CPA?  Many business owners hire CPAs because they are held to high ethical standards and have a high level of skill. They are especially helpful for tax situations that are complicated.

orBecause CPAs have special training, they charge more than bookkeepers and accountants. If you have a small to midsize business with typical financial needs, a CPA may be overqualified for you. It will save you a lot of money to hire a bookkeeper or accountant instead of a CPA.

So Who Should I Hire?

It depends on your needs, how big your business is, and how you want it to grow. When you don’t have time to do your own books, the first step is to hire a bookkeeper. When your business grows, you can replace a bookkeeper with an accountant. Hire a CPA if you have unusual or special circumstances.

Work with an accounting firm like Lin Company to take care of all your accounting needs. Our staff does bookkeeping, handles payroll, and sends out bills. Our accountants give you financial reports and insights. And our CPAs take care of even the most challenging matters. Contact us today, and we’ll help you find a solution that works for your business.