People who are unfamiliar with bookkeepers, accountants, and CPAs may not know the difference between these professions. All these personalities work with the financial data of the company, but still, there are various differences between these professions. Ensure to identify your business needs before hiring bookkeeping or accounting services. Bookkeepers keep an eye on all financial transactions. An accountant gives in-depth detail and analysis as compared to bookkeepers. A Certified Public Accountant or CPA is an accountant with a state license. Now, let’s discuss each profession in detail:
A bookkeeper is responsible to keep a record of the financial transactions of a company. Several bookkeepers use software for this task. A bookkeeper needs to accurately record transactions, including accounts payable, accounts receivable, payroll, inventory, and delivering reports on a monthly, quarterly, or annually.
The main role of a bookkeeper is to keep an eye on the money moving in and out of the company. The responsibilities of a bookkeeper are:
- Recording purchase and sales
- Keep track of accounts receivable and accounts payable
- Maintaining and processing payroll system
- Reconciling financial documents, such as bank statements
One of the basic tasks of a bookkeeper is to maintain the daily financial record of the business. In this record, a bookkeeper has to record all incoming and outgoing money. It can be done by using an excel spreadsheet, a lined sheet (a paper), or software. If you want, then you can hire bookkeepers services for your business.
Unfamiliar people will consider both a bookkeeper and an accountant as the same. Many accounting tasks are similar to bookkeeping tasks. Accountants may operate as a bookkeeper, but accounting is more difficult than bookkeeping. The basic role of tax accountant Melbourne is to analyse the financial data to provide advice on financial statements that can affect the business’s growth. Accountant’s daily tasks are:
- Offering tax advice
- Filing tax returns
- Identifying accounting differences
- Collaboration with auditors
- Developing and analysing budgets
- Ensuring bookkeeping practices follow the norms
- Preparation of financial statements
Accounting provides businesses with reports and insights that will help them bind together various financial indicators. As a result, the businesses will be positioned better to know where they need to improve and the areas of producing profits. Most often decision-makers take advice from an accountant when they need budget prediction, tax filing, and calculation of tax liabilities. Search for ‘tax accountants near me’ if you are looking for a tax accountant for your business.
CPAs are highly professional accountants who have passed the exam of CPA. They are certified professionals and help businesses prepare and file tax returns. Their daily tasks include:
- Preparation of transaction report
- Updating accounting records
- Performing detailed audits
The primary role of CPA is to maintain and keep track of daily financial accounts for companies, individuals, and government bodies. CPAs have better expertise as compared to regular accountants. They help businesses, companies, and individuals handle their wealth and meet financial goals. The main difference between a CPA and a regular accountant is that only a CPA is allowed to write an audited financial statement, such as an income statement or a balance sheet.
Bookkeeping Vs Accounting
|Manages daily financial transactions of a business.||Gives advice and insight about the finances of a business.|
|Company’s business data and reports.||Analyses business data and reports to offer accurate advice.|
|Help you with payroll and sales taxes, but he/she doesn’t file tax returns.||An accountant files business and personal tax returns.|
CPA Vs Accountant
|CPA (Certified Public Accountant)||Accountant|
|Must have a Bachelor’s and passed the CPA exam.||Must have a bachelor’s degree.|
|Can offer advice and insight on tax codes and business finances.||Offers advice and insight on business finances.|
|Can make audits and review reports.||Can create compilation reports|
Which Accounting Professional is Appropriate for Your Business?
Every business or individual needs to manage their company’s books and keep track of their finances. For this purpose, you should hire a bookkeeper. He/she will maintain a systematic record of financial transactions and balance the books. A Melbourne bookkeeper will manage payroll, pay bills, generate reports, and reconcile accounts.
If your business needs a clear picture of these reports and numbers, then you should hire an accountant for your business. An accountant will manage your taxes and help you enhance the cash flow to meet future goals.
Apart from this, if the transactions of your business are complex and you need someone more trustworthy than an accountant, then you should hire a CPA for your company.
Now, you have an idea of what are differences between a CPA, an accountant, and a bookkeeper. So, make sure to choose an accounting professional that best matches your business requirements. If you need an accounting professional for your business, then you can reach an accounting firm Reliable Melbourne Accountants.