If you need help with accounting and decide to hire someone, you have two options. You could either hire a certified public accountant (CPA) or a bookkeeper. Both are trained to handle accounting-related tasks, but their level of expertise and job responsibilities are drastically different.
In this article, we provide an overview of exactly what CPAs and bookkeepers are and what they do to help you better differentiate between them. We also share our thoughts on why it’s beneficial to choose a CPA over a bookkeeper for your business and individual accounting needs.
What is a Bookkeeper?
A bookkeeper is an individual who performs basic accounting tasks related to maintaining a ledger. Here is a breakdown of the bookkeeper profession:
- Job Responsibilities
- Track cash flow
- Keep records for appropriate accounts
- Manage payroll
- Prepare reports and financial statements
- Manage accounts receivable and payable
- Generate invoices
- License/Certification Requirements – American Institute of Professional Bookkeepers (AIPB) and National Association of Certified Public Bookkeepers (NACPB) certifications available but not mandatory
- Education Requirements – Minimum high school diploma
What is a CPA?
A CPA is a licensed professional whose skillset goes above and beyond standard accounting tasks. Here is a breakdown of the CPA profession:
- Job Responsibilities
- Analyze financial records
- Prepare financial reports
- Conduct audits
- Prepare and file taxes
- Provide financial consulting
- License/Certification Requirements – CPA license mandatory
- Education Requirements – Bachelor’s degree + passing of Uniform CPA Exam + continuing education annually
Why is a CPA a Better Choice for Accounting?
A key differentiator between the CPA and bookkeeping professions is that all CPAs can do what bookkeepers do, but no bookkeeper can do what a CPA does without becoming a CPA themself.
As you may have gathered from the profession overviews in the previous section, a CPA will possess a more diverse skillset and more expansive knowledge of accounting because of their educational and licensing requirements. They not only need a college degree and to pass the CPA exam but also must continue to be educated every year to ensure they possess the most current information related to accounting procedures and technologies, as well as tax law.
A bookkeeper can perform basic accounting services to keep your books up to date and provide a snapshot of your current financial situation. However, if you require any tax-related services or financial analysis and advice to help you plan for the future, you need a CPA.
For the most comprehensive business or individual accounting services and the highest levels of expertise in the field, a CPA is the clear choice!
Get Accounting & Tax Help from a CPA in the Illinois Valley
You don’t have to look far to find a CPA in the Illinois Valley. Julie Kilday of Kilday, Baxter & Associates is a CPA who has worked in public accounting since 2008. She and her staff provide a full range of accounting and tax services for businesses and individuals from their office in Oglesby, IL. Contact us to speak with one of our experts or schedule an appointment.