This is the question many small business owners ask as they are starting out, and some even after they have been in business for a few years. What is the difference and when do you need one or the other?
A bookkeeper is someone who performs the everyday tasks necessary to keep your accounting records in order – recording your costs, invoicing your customers, keeping up with inventory and such. They probably use some accounting software such as QuickBooks. In today’s world, this can be done in your office or virtually from their office. Many small business owners start out doing their own bookkeeping but soon find that the time required to do so takes away from the revenue producing activities that grow their business. There are not many small businesses any more that require a full-time bookkeeper. With bank feeds, account downloads, and smartphone apps the bookkeeping process has been streamlined.
Now, an accountant normally has a four-year degree in accounting and general business. They can normally do everything a bookkeeper does plus they are equipped to handle increased fiscal responsibilities within the organization such as creating budgets, compiling and reviewing financial statements and creating sales forecasts. The accountant will oversee the bookkeepers, make general ledger journal entries, review reconciliations and advise the owner on financial matters. They can compile your financial statements and help you analyze them.
A CPA, or Certified Public Accountant, has a degree in accounting but has also passed the Uniform Certified Public Accounting examination. They must meet state and national requirements and they may perform auditing, tax and financial services for individuals, small businesses and corporations. CPA’s have a working relationship with accountants and bookkeepers. They are normally reviewing financial records prepared by an accountant or a bookkeeper and offering their opinions and advice about business decisions, funding, growth and such.
So, what are you needing in your business? It is most economical to work with a bookkeeper to ensure your financial records are current and correctly recorded so that you may take these records to a tax specialist or CPA for filing. If your business is large enough that you require more than a bookkeeper, and you would prefer a business associate who can be part of your management team, then you might want to look at hiring a degreed accountant. And finally, if you require financial statements that are certified or you have a complicated tax return, you may want to consult with a CPA.
The good news is with Crockett Solutions you get all three! Our founder, Lee Ann is a retired CPA who works with our team to ensure your bookkeeping is done accurately and she is available to counsel you on business decisions from what is the best business structure for you to when do you need to get a licensed CPA involved. We believe in helping you make the most on your bottom line and we do that by working smarter, not harder. Give us a call today for your free consultation!