Okay—you know your business could use some help regarding your books and finances. But exactly what kind of help do you need? Often, this comes down to choosing between a bookkeeper and a CPA. Undoubtedly, both offer valuable services to you. Still, you need to be aware of some key differences between the two.
So today, we'll break down five of the biggest differences between the two to help you land on the right fit for your business.
Bookkeeper vs. CPA
Before we get into their differences, let's first cover what each of these professionals does.
What is a bookkeeper?
A bookkeeper is tasked with managing the day-to-day finances of a business. This typically includes tasks like processing payroll, tracking expenses, and generating financial reports. Therefore, they tend to be good with numbers, well-organized, and have a basic understanding of accounting principles.
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What is a CPA?
A Certified Public Accountant (CPA) is a licensed professional specializing in taxes and other financial reports. They typically have advanced accounting knowledge and experience that allows them to provide more sophisticated tax advice than bookkeepers can. CPAs may also offer auditing services or help with strategic planning.
Bookkeeper vs. CPA: 5 Top Differences
So—what are the five top differences between these two roles? Let's get into those next.
1. Education
CPAs tend to have more specific and advanced education requirements than bookkeepers do. For example, to become a CPA, individuals must have at least 150 hours of college-level accounting credits and pass an exam to obtain their certification. Bookkeepers, meanwhile, may only need a high school diploma or certificate in accounting or related fields.
2. Specialization
Bookkeepers are experts in managing day-to-day finances like payroll and expenses. In contrast, CPAs specialize more in taxes and strategic planning.
With that in mind, if you're looking for someone primarily to help with your taxes or provide financial consulting services, then a CPA is the better option. But, on the other hand, if you just need help with the daily grind of bookkeeping and financial record-keeping, then a bookkeeper is probably the more suitable option.
3. Regulations
CPAs are certified professionals who must adhere to certain regulations set by their state's board of accountancy. This may include abiding by ethics standards and completing continuing education courses continuously. Bookkeepers, however, generally do not have any regulatory requirements that they must meet beyond basic accounting principles.
4. Fees
The fees charged by CPAs tend to be higher than those charged by bookkeepers because of their additional expertise and qualifications. However, it's important to factor in the potential savings you could get from deducting taxes accurately or taking advantage of available tax credits when determining the most cost-effective option for your business.
5. Accountability
Regarding accountability, bookkeepers are more likely to take ownership of their work and can provide ongoing support if issues arise. CPAs, on the other hand, may be able to provide more complex advice but tend not to offer as much one-on-one assistance or follow-up the way bookkeepers typically do.
Want to be audit-proof? Head to this article next.
What's Right for Me: Bookkeeper vs. CPA
We've covered only five of the many major differences between bookkeepers and CPAs. Ultimately, your choice should come down to what kind of help you need for your business and whether the fees associated with each professional are within your budget. Weigh both options' pros and cons, consider which offers the better value for money, and decide what's right for you.
Further, here are some questions to ask yourself that can help you make the right decision:
What kind of financial help do I need?
Do I require assistance with taxes and strategic planning?
Am I seeking someone to manage my day-to-day finances or provide more complex advice?
How important is ongoing support and accountability in this role?
Are the fees associated with each option within my budget?
Answering these questions helps you determine whether a bookkeeper or CPA is right for you. Whichever option you choose, remember that having a professional handle your business's finances can save you time, money, and stress in the long run.
Final Thoughts: Hiring a Bookkeeper vs. CPA
Bookkeepers and CPAs have very different roles and responsibilities, so hiring either depends on your business needs. Many businesses need both! When it comes time to decide, consider the top differences between bookkeepers and CPAs outlined in this article—education, specialization, regulations, fees, and accountability—to determine which option is right for you.
And don't forget to lean on the team at Two Roads to find out exactly what our bookkeepers can do for you! Our team of experienced professionals can help you make the best choice for your business. So book a call with Two Roads to learn how we can assist you with your financial management needs.
Here are three more posts to read next:
Bookkeeping vs. Accounting: Why Do Books Matter? (Part One)
7 Ways to Reduce Your Employee Turnover (and Save Thousands!)
The Excellent Benefits of Bookkeeping Services: It Makes a Difference
