Differences Between Bookkeepers vs. Accountants vs. CPAs

by James Antonio

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When laypeople talk about bookkeepers, accountants, or CPAs (Certified Public Accountants), they can’t differentiate between the three. Commonly, these terms are interchanged. While all of these professionals deal with the finances and work towards a common end objective, their scope of work differs significantly. Together with the scope of work, there is also a variance between their professional status.

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Accountants, Bookkeepers, and certified public accountants (CPAs) all work with the company’s financial data.

Bookkeepers jot down when a company pays, receives, or owes money. Accountants offer more profound analysis than bookkeepers. A Certified Public Accountant or CPA is an accountant with a state certificate.

Bookkeepers

There was a time when bookkeepers literally maintained business accounts in a hard-copy ledger but nowadays bookkeepers are more likely to access software, however, the objective is the same – to keep a tab of the money coming in and going out of the organization. If the company is a small-scale company, the owner may be able to manage the work, but bookkeepers have the experience to do it effectively and are likely to do it more accurately.

Usually, bookkeepers do not need any official training; the data they maintain is further handed over to the accountants. Their regular work includes

  • Keeping a regular record of financial transactions
  • Recording transactions
  • Billing for services offered or products sold
  • Payment to suppliers
  • Managing payroll-related activities
  • Payments of loans
  • Generating invoices
  • Making financial reports

Accountants

So basically accountants should at least have a degree in bachelors. However, it doesn’t necessarily have to be in accounting. A company may remunerate an accountant to maintain the ledger, but it’s economical to appoint a bookkeeper and save an accountant for complex level tasks. Accountants can evaluate business finances and provide management with a broader-picture viewpoint. The bookkeeper jots down the data; accountants convert it into more productive information for business planning. Accountant tasks include:

  • Offering tax advice
  • Maintaining financial statements
  • Computing tax liabilities
  • Preparing income tax returns
  • Making sure bookkeeping activities strictly adhere to the standards
  • Looking for accounting discrepancies
  • Generating and examining budgets
  • Working jointly with auditors

Certified Public Accountants

CPAs are those accounting professionals who have literally worked on taking their skills to an upper level and cleared the Certified Public Accountants exam. They are licensed by a specific state and assist individuals and businesses in creating and registering tax returns. Therefore, they are your initial point of communication in the case of IRS audits. The primary role of a CPA is to record and maintain a regular check on financial accounts for organizations, individuals, and governmental bodies. CPAs are more trustworthy and have better skills than usual accountants. They assist businesses, companies, and individuals handle their wealth and attaining financial objectives. CPAs are individuals that have been through years of education and training and cleared a state CPA examination paper. Their day-to-day work incorporate:

  • Maintaining reports on transactions
  • Updating and upgrading accounting records
  • Presenting clients in front of the IRS
  • Executing detailed audits

Bookkeepers Vs. Accountants Vs. CPAs

Below is a list stating various areas in which the jobs of bookkeepers, accountants, and CPAs usually vary?

Training

Though bookkeepers might not have any official accounting training, they might have skills relating to data entry, money management, finance, and payroll. They may have knowledge about different types of bookkeeping software, data analysis software, payroll systems, and POS systems. Bookkeepers do not require a university degree in order to perform the important functions of their position.

Accountants and CPAs usually go through official accounting training and education that develop them to manage more difficult financial projects. They can get a degree in accounting or something related to their field that provides the knowledge related to budgeting, financial statements, taxes, money management, and financial advising. CPAs are required to study specified knowledge and skills in regard to clearing the CPA exam and to call themselves certified CPAs.

Job duties

The job duties of bookkeepers, accountants, and CPAs each incorporate financial data but differ in complexity and gamut of accountabilities. Bookkeepers may maintain financial transactions in spreadsheets, match records with bank statements, submit employee payrolls, generate monthly reports, and do numerous other simple financial tasks.

Accountants should make sure of the accuracy of financial data, asks organizations for the payment of taxes, report those taxes, and prepare a yearly budget. They might also make financial reports. For instance balance sheets, cash flow statements, statements of shareholder’s equity, and income statements. CPAs might conduct many of the similar tasks as bookkeepers and accountants but also offers extra support during audits, often performing audits themselves. Moreover, a CPA might assist organizations to communicate with the IRS.

Certification

Bookkeepers do not require any accounting certification. Because of this, Bookkeepers get the flexibility that permits them to acquire experience in the area before gaining a specialized degree or passing a certification exam.

Accountants usually might require a bachelor’s degree in a connected field in order to be applicable for their positions. CPAs acquire certification in order to offer specific auditing and taxation services, together with an accredited standing. A CPA certification needs to clear the uniform certified public accountant examination paper, which has multiple test sections such as business environment and concepts, financial accounting and reporting, auditing and attestation, and regulation.

Skills

Bookkeepers might have skills or have knowledge with regard to money management, spreadsheets, data entry, organization, financial math, arithmetic, and an eye for details. These skills assist them to work on important projects however might not allow them to offer financial advice, finish tax filings or generate financial reports or budgets.

Along with a multitude of skills that bookkeepers have, accountants and CPAs often have expertise with regard to forecasting, data analysis, teamwork, budgeting, communication, and advanced financial math. They usually utilize these skills to assist business owners make many crucial decisions relating to the financial future of their business.

Points to Remember While Selecting Between becoming a Bookkeeper, Accountant, or CPA

What are certain points that you need to keep in mind while selecting between becoming a bookkeeper, accountant, or CPA?

Below are some tips to assist you in choosing which of these positions you may pursue:

Examine Your Timeline

First of all, you need to determine if you want to begin with a job soon or still have some time to continue your education and further training. You can become a bookkeeper with restricted training. Whereas, if you have sufficient time to acquire a degree, you can find various opportunities and advancement as an accountant. However, if you can further invest your time, you can study and appear for the CPA exam and increase your job opportunities and earning possibilities even further.

Decide Your Liability Comfort Level

Bookkeepers, accountants, and CPAs all have the liability to make sure they jot down and record accurate and precise data. Since bookkeepers don’t manage audits or tax information, hence, they have the least liability. All accountants are accountable for stricter financial information, and CPAs might deal with material subject to federal and tax regulations. Keeping in mind the possible liabilities of each job might assist you in deciding which position you’d like to take.

Select Between Job Responsibilities

Each of these accounting roles asks for different requirements and skill levels. Bookkeeping basically needs more simple duties, however, accounting and CPA roles ask for more complex and involved responsibilities. Bookkeeping, accounting, and CPA positions all need you to utilize your math skills, but accounting and CPAs might use more advanced and complex math than bookkeepers. Recognizing and analyzing this difference may assist you in choosing a job that reconciles with your skills and is in accordance with your current wants and expectations.

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Frequently Asked Questions

 
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Why should do you change the Employee status instead of deleting them on QuickBooks?

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Is it possible to use the Direct Connect option to sync bank transactions and other such details between Bank of America and QuickBooks?

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Why should do you change the Employee status instead of deleting them on QuickBooks?

If you are unable to see the option to terminate an employee on your list of active employees on the company payroll, this mostly implies that they have some history. Thus, if you change the employee status instead of deleting it on QuickBooks, the profile and pay records remain in your accounting database without any data loss in your tax payments.


What are the various kinds of accounts you could access in QuickBooks?

QuickBooks allows you to access almost all types of accounts, including but not limited to savings account, checking account, credit card accounts, and money market accounts.

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