Bookkeeper, Accountant, or CPA
What type of Financial Professional does your Small Business need?
Choosing the right type of financial professional for your small business can be difficult. Learn the differences between bookkeepers, accountants, and CPAs.
In most successful small businesses, the owner will come to a point where he or she must choose to manage growing their business and trust another person to manage their books. Choosing the individual to help run the financial side one’s business can be confusing. Sorting through this confusion is especially important for this position since the person chosen has knowledge of and power over the business’ finances.
Bookkeepers
A bookkeeper is a person with experience in daily accounting entries. They generally have experience with accounts payable and receivable, payroll, and employer-filed taxes. Bookkeepers may have an associate’s or higher degree, or they may be trained on-the-job. Bookkeepers can be an excellent choice to complete the daily accounting functions for a small business. Not only are their fees less than that of an accountant or CPA, they may also be more well versed in some of the common small business accounting software programs.
Choosing the right bookkeeper for your small business is important. A bookkeeper can either be hired as an employee or a subcontractor directly for your business, or you can pay a bookkeeping service company. By hiring an individual to do your books you may get more one-on-one time with them and they may have the opportunity to learn your company better; this can lead to better decisions when they are tracking your finances. By hiring a service company, you can gain more security that your finances are safe because there is less chance for crimes like embezzlement to occur.
Accountants
An accountant is educated in all basic accounting functions and will most likely have a bachelor’s degree in accounting or business and possibly a master’s degree as well. Hiring an accountant may be suitable for your business if the complexity of the daily entries is greater than a bookkeeper may be comfortable with. However, not all accountants are trained in bookkeeping roles and in small business accounting software so make sure to be specific about your business’ needs when interviewing individuals for accountant positions.
Certified Public Accountants (CPAs)
CPAs are individuals that will have the same amount of education as an accountant but have also passed a series of tests and must take continuing education classes yearly to retain their license. The requirements to become a CPA are rigorous; it takes an accountant much work and dedication to gain and keep their CPA license. Although the requirements to sit for the CPA exams can be different from state to state, the exams themselves are identical.
Hiring a CPA full-time to take care of his or her books may be difficult for the average small business owner. Individuals that have earned this designation may be more expensive to keep than accountants without it, and will be more expensive to retain than a bookkeeper. However, since CPAs have to consider the effect the decisions they make will have on their license, they are likely to be cautious and trustworthy.
Combine Specialists
One method for your small business to gain both the expertise of a bookkeeper and the auditing skills of a CPA is to hire a bookkeeper to complete the daily entries. Then your company can pay a CPA to go over your books either monthly or quarterly to ensure that entries are made correctly and that everything looks to be in order. If your business is more complex in nature, hiring an accountant with bookkeeping experience and having a CPA review the books quarterly or yearly may be an alternative.
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