Do You Really Know the Difference Between A Bookkeeper, Accountant andCPA?

10 Sep Do You Really Know the Difference Between A Bookkeeper, Accountant andCPA?

From The Association of Independent Bookkeepers:

Bookkeeping v. Accounting:

Accounting includes the recording, compiling, record keeping and analysis of all financial transactions and events, including presentation of the financial statements (income statement, balance sheet and statement of cash flows).

Bookkeeping focuses on the recording, compiling and record-keeping of financial transactions and events; it does not include analysis or presentation of the financial statements.  A bookkeeper’s job also includes various office skills, such as processing and filing orders and payments from customers- and processing and paying invoices from vendors.

If you are asking your bookkeeper to produce financial reports, evaluate your insurance premiums, calculate your margin and monitor your cash flow you are asking them to be your staff accountant.  This is different from a CPA or certified public accountant.  A CPA is an accountant that has undergone additional certification, training and testing.  Often the term accountant and CPA are interchanged when they shouldn’t be.  The term bookkeeper (and the pay rate) is often applied to the staff accountant erroneously in many small businesses.