While the meme above may be funny/what I normally hear it could not be further from the truth. Yes a bookkeeper and an accountant are similar of course they are both in the accounting field and are dealing with the finances but the same? No way. Often these are mixed up because an accounting practice or business will offer bookkeeping services as well as accounting services so to the client they are the same thing however the accountant typically offers bookkeeping services as an additional service they can help clients with. It also allows accountants to be better accountants because they gather the information instead of a bookkeeper. Below we will go more in depth as to what the difference is that way I can stop seeing this quote all over the internet. :)
What is a bookkeeper?
A good way to start understanding this is to know what a bookkeeper is and what an accountant is, we'll start with bookkeeper. A bookkeeper is in charge of inputting and maintaining the financial information of the company. This can include inputting expenses and revenue, handling banking including cutting checks and categorizing bank activity, creating a chart of accounts, managing accounts receivable and accounts payable and any other data entry related tasks that come with the financial information of the company. The role of a bookkeeper does not require any formal degree or training and can be learned through a few common courses online.
What is an accountant?
An accountant takes the job of a bookkeeper and expands on it. An accountant interprets and understands the financial data of the company, often creating a sort of reporting on that data whether that be in the form of a financial statement or a financial analysis report. An accountant often will take the information inputted by the bookkeeper and assess that information translating it for the company owner to understand with ease. The accountant will view and understand the financial data so they can offer insight to the owners regarding the data. Additionally, accountants will often run financial analysis and forecasting with the financial data so they may offer additional insights on potential outcomes as well as changes from the past. Lastly, an accountant has the additional duty of making sure the company is within its industries guidelines and regulations. The accountant will go through the financial data to ensure compliance with these guidelines. An accountant will typically have a bachelors degree and relevant work experience for the role.
Bonus: Who does my taxes then? Hint: a CPA!
This may be the next question you arrive to after reading through this article as there is no mention of taxes anywhere. An accountant can do your taxes however they typically prepare these and then give them back to you to file. However a CPA (Certified Public Accountant) is a step up from an accountant and comes with the additional terrain of taxes and regulations. A CPA is someone who studied to take a 4 part exam and passed to obtain the license of certified public accountant. This also allows them to put those 3 letters behind their name, as I am sure you have seen. The CPA license allows the licensee additional benefits to be able to assist their clients. They have the ability to become fiduciaries meaning they can perform and sign off on audited financial statements to be issued to stakeholders. This allows the stakeholders peace of mind that the numbers are correct. This also means that the CPA is bound by legal duty to act on behalf of the clients best interests and not their own. Lastly, CPAs have the ability to sign off and represent a client during an IRS audit. Meaning when they prepare taxes for a client they can take on the additional responsibility of working with the IRS during an audit if necessary. Generally a CPA will be more knowledgeable as well regarding the tax code as they had to study the code significantly at the time of licensing and to maintain that license.
Luckily for you at CAS: Tax, Accounting & Bookkeeping Services we take care of all of these duties, we are licensed CPAs that perform all the duties of a bookkeeper, an accountant and a CPA all to help our clients in the best way possible. If you are interested in any accounting services please schedule a call with us! We would love to help you and your business succeed! Scheduling at https://cas-accounting-scheduling.as.me/
Thanks for reading everyone and I look forward to hearing from some of you real soon!