Which accounting professional does your business need? No matter how small your business is, every business needs a financial and tax advisor. The terms bookkeeper, accountant and CPA have been used interchangeably, but there are vast differences on the value they can bring to your business. Below are the tasks preformed by accounting professionals so you can determine whether your business needs a bookkeeper, account or CPA for your business accounting and business taxes.
What does a bookkeeper do?
A bookkeeper simply keeps your financial books. Their main responsibility is to accurately record transactions such as; accounts receivable, accounts payable, inventory and sometimes payroll. They can take the information they’ve recorded and provide your business with reporting on a monthly, quarterly or annual basis. You might think that is all your business might need. However, there are certain tasks that a bookkeeper can’t do, such as analyze the reports and provide tax advice, which is essential to your business growth. Bookkeepers are still helpful for your business because they handle the recording aspect of your business transactions, which is the first step in the accounting process.
What does an accountant do?
Think of an accountant as a step up from a bookkeeper. An accountant can be responsible for the same responsibilities as a bookkeeper; however, they typically don’t perform the bookkeeping task. Their focus is to take the recorded information provided by the bookkeeper, interpret and analyze the data. An accountant can handle the entire accounting process and provide in depth financial statements, which will provide more insight to the financial health of your business and help you make informed business decisions.
What does a CPA do?
While CPAs are accountants, not all accountants are CPAs. A CPA is a certified public accountant that has met certain state and educational licensing requirements and passed the CPA exam. They must also complete 40 hours of continuing professional education every year. A CPA license allows them to perform certain tasks that a standard accountant can’t perform. They can prepare an audited or reviewed financial statement and perform certain taxation services. A CPA is allowed to sign a client’s tax returns as a paid preparer and represent client’s on behalf of the IRS. Compared to an accountant, a CPA has the experience needed to perform a more detailed and thorough analysis and advise on tax and financial matters. Because of the educational requirements for their license, they are more prepared and put their license on the line by giving you tax and financial advice.
Which accounting professional is best for your business?
When it comes to choosing which accounting professional is best suited for your business, every business no matter how small or large needs a bookkeeper and an accountant. Although, we recommend that every business hires a CPA because they have the expertise and can represent you on behalf of the IRS. By choosing a CPA, you won’t have to go out and find another one to represent you on behalf of the IRS for the work your standard accountant did. At Gurian CPA, you will receive the three levels of service and will act as your bookkeeper, accountant and CPA.
By: Paige Knight
