Feeling Puzzled? Understanding the ABC's of Accountants, Bookkeepers, and CPA's
What’s the difference between an Accountant and a Bookkeeper? Entrepreneurs often confuse the roles of CPA’s (Certified Public Accountants), Accountants, and Bookkeepers, since many of their duties overlap.
For starters, they are all concerned with the financial performance of your company. Many small business owners operate as bookkeepers and employ an accountant for their taxes at years' end. But if bookkeeping is just not your idea of fun, what do you do?
Your accountant is focused on your taxes and making sure your 1040, Schedule C, K forms and all tax-related items meet the IRS guidelines, while your bookkeeper is more focused on daily, weekly, and monthly transactions to see that they are captured in a meaningful way in order for the entrepreneur to make wise business decisions.
However, a quick overview is probably more helpful.
Accountant/CPA = annual taxes and tax advice
Bookkeeper = rest of the year financials
· Concerned with daily and composite entries of financial data. Including reconciling accounts and keeping transactions balanced and detailed.
· Recording daily deposits and details about what money is coming in and where money is going out by detail.
· Manage Accounts Payable and Accounts Receivable
· Handle Payroll
· Handle Sales Tax
· Monitor Cash Flows and Review Files for Fraud and Accuracy
· Maintains Historical Accounts
· Receipt Maintenance
· Builds and Creates Financial Reports as needed from your bookkeeping software
· Professional Bookkeepers with 5 years’ experience charge between $30 and $75 per hour
· Concerned with year-end data and interpreting data for tax records
· Preparing adjusting entries for year-end such as amortization and deprecation
· Preparing company and personal income tax returns
· Professional CPA’s usually charge between $150 and $250 per hour depending upon the complexity of your tax situation
· Strategic financial and tax planning
You should have both a Bookkeeper and an Accountant – they should be willing to work together for the good of your company.
Have your accountant and CPA do your taxes, not your daily books.
As a bookkeeping firm, our goal is to make sure your financials make sense to you and are easy to read. Hit the Easy button and give us a call. We will teach you in simple terms how to manage your books and review your ongoing financial picture so you can make wise business decisions.
Lynn Talbott, MBA, PHR, has over 20 years’ experience consulting with entrepreneurs of small to mid-sized businesses in the HR and office management capacity. Her specialty is Office/Human Resource Manager coaching and training and finding practical solutions for bookkeeping errors and HR blunders. Lynn has helped manage over 50 business start-ups and many of those companies continue to rely on her expertise today as they continue to grow.