Accountants, bookkeepers, CPAs, OH MY! In the financial world, many titles are given to accounting professionals that specify their jobs and skills.
Controllers, CFOs, payroll specialists, CPAs, bookkeepers, tax preparers…the list goes on.
So as a business owner who is not an expert in all things accounting and the finance industry, how do you know who to hire to help with what accounting processes and who will benefit your business the most?
Don’t worry; we’ve got you covered.
Getting down to the basics of accounting, you need to know that the terms for CPA and accountant are not interchangeable titles.
All CPAs are accountants, but not all accountants are CPAs. So that is where we will start.
Along with bookkeepers who help organize and manage your daily, weekly, and monthly financial tasks, an accountant and/or CPA oversees the health and performance of your business to guide you on a path of success and financial well-being.
So what’s the difference between a CPA and an accountant? Let’s discuss.
What Is An Accountant?
Becoming an accountant is a step toward becoming a CPA, but you don’t have to go that far if you don’t want to.
Currently, in the United States, there are almost 1.5 million accountants.
An accountant is a financial professional who performs accounting and financial tasks for a business. Mostly all, if not all, accountants hold an associate’s or bachelor’s degree.
An accountant is NOT a bookkeeper, as those jobs are easily confused with each other as well. Instead, an accountant receives information from the bookkeeper (ledgers, accounts payable, accounts receivable, cash flow, et) and then classifies, analyzes, interprets, and reports back to the company their findings and recommendations.
Here is a good tip on how to remember the difference: A bookkeeper manages and organizes while an accountant analyzes and reviews.
You can check out our latest blog that talks about outsourced bookkeeping for insight as to what a bookkeeper does for businesses!
Some tasks of an accountant include:
- Financial reporting
- Auditing
- Preparing Budgets
- Performance management
- Reconciling bank accounts
- Risk assessment
- Cost analysis
- Analyzing financial statements
What Does A CPA Do?
If an accountant does all of that, then what is a CPA, and how does a CPA benefit a business?
CPA stands for Certified Public Accountant. There are approximately 670,000 CPAs currently throughout the United States.
To become a CPA, you must complete 150 hours of college coursework related to accounting along with passing a rigorous set of tests.
CPAs are highly respected and recognized as financial experts when it comes to helping business owners, investors, and stakeholders understand their overall financial health and performance.
CPAs are also fiduciaries with legal duties and the power to act on behalf of their clients and the companies they represent. When you decide to engage a CPA versus an accountant is up to you, but a few times you want to heavily consider working with a CPA include:
- Your tax return is complicated
- If you, personally, or your business is being audited by the IRS
- You’re a public corporation and need audited financial statements (a CPA is required in this case!)
Want To Learn More About The Difference Between A CPA And an Accountant? Connect With Redmond Accounting Today!
Here at Redmond Accounting, we offer a multitude of services, including virtual accounting and bookkeeping. We also provide controller services, outsourced CFO services, payroll services, and more.
Our accounting firm is 100% online, which means we can work with businesses across the country to provide timely, accurate, and professional accounting work.
To learn more about Redmond Accounting, browse our services, follow us on social media, and schedule a consultation!
