People often confuse the roles of bookkeepers, accountants and certified public accountants (CPAs). It's not surprising since many of their duties overlap, but the overall responsibilities of each role and the level of authority held by the positions differ. They all share fiscal responsibility – in degrees – for the company or organization for which they work.
Often considered by accountants and CPAs as just technicians or clerks, bookkeepers perform some of the same daily tasks as do accountants and certified public accountants. Many bookkeepers work as freelancers for small businesses in need of financial recordkeeping. Bookkeepers maintain daily accounting records, posting debits and credits, generating invoices for clients and checks for vendors as well as handling payroll. Many small business owners often double as bookkeepers. Bookkeepers typically lack the education of an accountant or CPA, as they gain on-the-job experience. Professional organizations for bookkeepers help to improve professional recognition for bookkeepers by accounting professionals as well as providing certification programs of abilities and skills.
Accountants have a four-year college degree. While many accountants have an educational background in accounting, some are more general business majors. Accountants work with accounting clerks and technicians who handle daily financial entries. Accountants oversee or perform billing, make general ledger entries, review accounts payable activity completed by clerks or technicians or handle payroll. A mid-level position in the accounting department, accountants report to accounting managers, company controllers or financial directors, all of whom might be certified public accountants.
Certified Public Accountants
Certified Public Accountants have a focused education in accounting and must pass the Uniform Certified Public Accountant Examination. CPAs must meet state education and experience requirements before they can sit for the exam. Accountants not meeting these requirements cannot use the CPA designation legally. Certification is renewable every two years, subject to state requirements. CPAs have a higher level of responsibility than bookkeepers or accountants; because of their certification, they can perform auditing, tax and financial services for individuals, corporations and other business or nonprofit organizations.
Many entrepreneurs who launch their own businesses start out by wearing the bookkeeper's hat and doing their own books & taxes, in addition to doing just about everything else in the business, too. Simple bookkeeping software, such as QuickBooks, makes that possible. But there comes a time in a growing enterprise when it makes sense to hand over responsibilities for taxes, accounting, and the rest of the financial functions to specialists.
The right CPA can help a business with not only ensuring that the accounting records are accurate and maximizing deductions on tax returns, but with longer term tax planning, business planning, and even personal tax planning. I'd love to help you when you are ready to upgrade to a CPA!
Hi! I'm Jaimie and I have a B.A. in Accounting, an MBA with an emphasis in Accounting and a CPA license. I worked for about 10 years in CPA firms doing audits and reviews and then for about 10 years in private companies managing accounting departments. I've learned a lot about accounting, finances and taxes over the last 20 years! And now I want to share my knowledge with you here!