People often ask, “What is the difference between a bookkeeper and a CPA?” While it is a bit of a complicated question, let’s see if we can make some sense of it by looking at the services each might perform.
Bookkeepers record bank and credit card transactions into accounting software and reconcile those accounts on a regular basis. They may also handle the invoicing of customers, collecting payments, processing payroll, and paying bills.
Basically, a bookkeeper should be able to generate an income statement and a balance sheet for a business with all the transactions in their proper category.
Here is where it can get a little confusing. The “CPA” title is simply a certification earned by an accounting professional – and it doesn’t necessarily tell you what types of services the CPA performs. A CPA might prepare tax returns or audit financial statements. A CPA may even do some bookkeeping services.
So a CPA can be a bookkeeper – but does that mean they are more qualified as a bookkeeper than someone who doesn’t have a CPA license? Not necessarily. A CPA who specializes in tax preparation is probably not the best choice to handle your bookkeeping.
When you are looking to hire an accounting professional, it is important to find out exactly which services that person will perform. Often times you will need both a bookkeeper and a CPA. It’s all about finding the right tool for the right job.