The words “CPA,” “accountant,” and “bookkeeper” are often being confused to mean the same thing but that should not be the case as all of them are different if defined professionally. They are totally different in terms of the task they perform, scope of work, and licensing as well as their professional status and their position with the Internal Revenue Authority.
What is the role of Bookkeepers?
A bookkeeper is an employee or a contractor working for a company who is charged with the responsibility of keeping the financial books.
A number of bookkeepers in the present day use some kind of accounting software such as QuickBooks to perform this task. Bookkeepers are responsible for keeping accurate records of transactions such as accounts receivable and payable, inventory, and in some cases payroll, and giving monthly, quarterly or annual reports.
For instance, a bookkeeper for my consulting and writing business is responsible for making payments on my behalf, keep track of my credit card balance and other payables, and submits monthly reports to me. He also makes payments for my sales taxes and fills forms 1099s and 1096 at the end of each financial year. However, he is not involved in report analysis or offering tax advice for me.
What is the role of Accountants?
Accountants are seniors to bookkeepers. They can but normally they don’t perform bookkeepers’ tasks. Their role is to give a detailed financial statement, perform auditions on the books of public companies, and they may also avail reports for tax purposes. However, IRS classifies accountants as “unenrolled preparers” meaning that they are not entitled to handle issues of tax returns or act as a client during tax audits as well as others matters to be solved before the IRS.
Those who are permitted to represent their clients who are taxpayers before the IRS are the CPAs, Enrolled Agents, and tax attorneys.
What is the role of Certified Public Accountants (CPAs)?
A CPA has an extra level of expertise and credibility. CPAs have sat for and passed a given examination and have qualified to get the license to practice as accountants countywide. They are recognized by the state. A CPA has an extra level of expertise and credibility. CPAs have sat for and passed a given examination and have qualified to get the license to practice as accountants countywide. They are recognized by the state. At all time, CPAs are expected to maintain the confidence of the public and serve only the interest of their clients.
CPAs have the responsibility of auditing, consulting and reviewing financial documents. During auditions, they check the financial books as well as the records to ensure that the information recorded is as accurate as expected. They can also come in to assist the business firm in setting up the best method for keeping records. They are also at the forefront in consulting on the behalf of the business owners and help their clients to come up with new business ideas.
Apart from preparing and reviewing financial statements, CPAs are also involved in preparing the tax returns for both businesses and individuals. They can sign those tax and stand before the IRS during audits o represent the clients. The American Institute of Certified Public Accountants (AICPA) is the national professional body for CPAs.
Which accounting professional is fit for you?
The success of a company depends a lot on the record keeping capability of its accounting office. It is therefore important for every company, however small or big it is, to find a professional who can keep track of its accounting books. It doesn’t matter whether you will choose to hire an employee or a contractor. The fact remains that you need a bookkeeper. That bookkeeper can work under a CPA or an accountant.
You also require someone to be with you while reviewing your financial reports and making critical decisions regarding taxes and finances. I can’t suggest to you that you should get a CPA but has been discussed above, an accountant or a bookkeeper is not eligible to represent you and your business before IRS. In my opinion, this is an important matter and it brings the difference that exists between an accountant and a CPA. In my case, I have a CPA to assist me in reviewing my books and also advises me accordingly with matters of tax. He is also responsible for preparing as well as submitting my business and personal tax returns online.
