All three titles work in the financial sector of business. Though they are essentially the same, their reach is different. Think of it as different levels of authority for your finances. No one position is of greater value than another for the day to day, but when the IRS gets involved...you will want a CPA who is knowledgeable about your finances in your corner.
The Accountant
An accountant performs tasks to prepare and analyze financial data to offer projections and advise management on elements that affect company growth. Accountants can also provide tax advice, calculate tax liability, file income tax returns, develop budgeting plans, collaborate with auditors, and monitor bookkeeping practices. Accountants take the numbers and turn them into statements that help businesses increase profitability. One key distinguishing factor is Accountants are degree'd professionals, but that does not license them as a Certified Public Accountant.
The CPA
A Certified Public Accountant or CPA is a licensed professional certified by the state in which they operate. They have the highest level of education and therefore the highest level of accessibility. A CPA can perform all the functions of an Accountant with a few additions. A CPA can perform detailed audits that may be out of the scope of work of an Accountant. A CPA can represent clients before the IRS regarding any tax matters. Many CPA firms also perform bookkeeping functions daily to ensure that financial reports are available when needed.
The Bookkeeper
Finally, we have Bookkeeper who is the backbone of the financial process. A Bookkeeper provides day-to-day input of financial records and transactions, performs payroll services, pays the bills and prepares the financial reports. Although it seems like a lower position, a Bookkeeper has their finger on the pulse of the financial health of the business in which they operate. They see what cash flow statements and profit-and-loss statements are saying about the company. Although they don't have the authority to stand before the IRS, or required to analyze statements, the Accountant or the CPA cannot do it without the Bookkeeper ensuring that the records are clean and organized first. If the books are clean, you will never have to work with the IRS. A Bookkeeper can still analyze and provide insight using the financial reports, meaning that function is not exclusive to the Accountants or the CPA.
As we can see, all three perform the same functions. The differences are in the authority and expertise, especially with tax matters. When choosing your need for financial expertise, make sure you choose the right level of authority that you need.
Commentaires