Who Do I Hire? Accountant vs CPA vs Bookkeeper

Who Do I Hire?

Part 2 of a 10 Part Series

Accounting for Small Business 101

This 10 part guide will provide you with the most basic fundamentals of accounting for your business. Whether you’re a budding entrepreneur with your first start-up or a stay-at-home mom selling knit hats on Instagram, lay the groundwork. Here’s how.

Part 2: Who Do I Hire? Accountants vs CPAs vs Bookkeepers

No, we’re not talking about a WWE showdown of finance professionals. We’re defining the difference between accountants, bookkeepers, and CPAs. And helping you decide who to hire.

These three terms are often used interchangeably. But, they are different. Knowing the difference will help you make the right decision for your business.

Finding the right financial pro for your start-up will keep it healthy and strong. Think of your business like your physical health. To stay in peak condition, you want a healthcare professional to keep you in shape. Here is how to choose the financial health pro for your business.

Bookkeepers: Your Personal Trainer and Nutritionist

Many would say the basis of good physical health is diet and exercise. A nutritionist and personal trainer helps you track calories, macros, steps, and miles. These are bits of data that give you awareness of your general health and goals.

Likewise, a bookkeeper is in charge of your financial data such as credits and debits. The term bookkeeper is self-explanatory: they keep your books. They record daily transactions, post debits and credits, create invoices, and run payroll. They're trained in Quickbooks, Xero, or other accounting software.

Should you hire a bookkeeper? Many business owners take care of their own bookkeeping. But if you are finding this task time-consuming, difficult, or draining, it’s a good idea to hire a bookkeeper. You may hire one as an employee, or use an accounting firm to provide bookkeeping services.

Bookkeepers do not need a degree or any credentials, but they may be licensed by the AIPB or NACPB. Bookkeepers normally charge less than accountants.

Accountants: Your General Practitioner

Just as a GP cares for your entire well-being, an accountant cares for the whole scope of your financial health. Your accountant monitors all your banking “vitals”. And they give you meaningful insights on keeping your finances in tip-top shape. They can also diagnose monetary problem areas and prescribe methods of improvement.

Accountants can do everything bookkeepers do: enter transactions, write invoices, and manage payroll. They also analyze data, run reports, prepare statements and tax returns, and spot trends.

Should you hire an accountant? If your business is growing, or you want it to grow, an accountant is invaluable. They allow you to focus on what you enjoy, while being a partner and a trusted advisor.

Accountants have a bachelor’s degree from an accredited college or university. They may also take a Uniform CPA exam to become a certified public accountant. Accountants charge more than bookkeepers, and charge even more if they become a CPA. 

CPAs: The Team of Specialists

If you are a professional athlete, you have a team of specialists to keep you in peak physical condition. If you have an illness, you rely on specialists to manage your symptoms and hopefully cure you.

A CPA is like having a team of specialists on hand to boost your business or heal a specific problem area. CPAs must pass an exam and continue education to keep their accreditation. They can conduct forensic accounting if you suspect criminal activity is happening. They will represent you before the IRS if you are audited. They can also conduct their own audit of your business. Their in-depth study of your finances can provide you with important insights.

Should you hire a CPA? Many business owners work with CPAs because of their ethics and advanced skills. They are especially valuable for complicated or problematic tax situations.

CPAs charge more than accountants and bookkeepers. While you wouldn’t have a neurologist track your calories, you wouldn’t have your CPA take care of bookkeeping. It is much more cost-effective to hire a bookkeeper and save your CPA for the big stuff.

Should I Hire a Bookkeeper, an Accountant, or a CPA?

It depends on your needs, the size of your business, and your goals for growth. Hiring a bookkeeper is the first step when you no longer have time to manage books on your own. You can replace a bookkeeper with an accountant when business expands. Hire a CPA  for special circumstances or outstanding growth.

Meet all your needs by working with an accounting firm like Pioneer Accounting Group. Our staff provides bookkeeping, payroll, and invoicing. Our accountants provide expert insights and reporting. And we network with the best local CPAs. We even provide CFO services. Get in touch with us today and we’ll help you with a custom solution for your business.