September 25, 2017

CPA versus Bookkeeper

In order to become a Certified Public Accountant most states require individuals to pass the Uniform CPA Examination and meet educational, experiential and ethical requirements. But you must be a CPA to do bookkeeping, right?

Wrong!

Only CPAs can audit a company’s books and validate their financial information. You do not need to hire a Certified Public Accountant to act as an accountant or bookkeeper.

What Bookkeepers Do

There are eight steps to the bookkeeping cycle. A bookkeeper performs one or more of these steps and is sometimes called an AAT (accounting technician). In large companies, for instance, the bookkeeping cycle might be divided into departments such as Accounts Receivable, Accounts Payable, or Payroll. While most often these people are referred to as ‘clerks,’ they might also be considered bookkeepers because they are “keeping the books” for a company. In small companies, the bookkeeper may perform the entire bookkeeping process or might just enter data to give to the “accountant.”

What Accountants Do

Someone has to set up the bookkeeping system, monitor it, and interpret the results. These processes are called “accounting.” The accounting process is much less mechanical and more subjective. It begins with designing a system that will benefit the business by capturing the financial information in a useful manner without being overly burdensome to the bookkeeper. Once established, the accountant monitors the system to ensure it is doing what it’s supposed to do. And finally, on what’s generally a monthly basis, the accountant presents the financial statements to business management in such a way that important financial decisions can be made.

So, you see, you don’t need to hire a CPA when you have a business. Hiring a bookkeeping service company to handle your bookkeeping needs instead of letting the CPA handle all of your accounting can save you money. Let us help you get out from under your stack of paperwork. To enlist help from Bonafide Accounting Services, please call us today at 919-415-4713 or send us a request via our contact form.