Bookkeeper vs accountant vs CPA: which does your business need?
Three roles that overlap but are not the same. Here is what each one does, what they are licensed for, and how most small businesses combine them.
What each role does
Bookkeeper
Categorizes transactions, reconciles bank and card accounts, manages bills and invoices, and keeps the general ledger current. No license is required.
Accountant
Builds on bookkeeping: accruals and adjustments, month-end close, financial statements, budgets and analysis. A degree is common; a license is not required for this work.
Certified Public Accountant (CPA)
Licensed by a state board of accountancy after the Uniform CPA Exam and experience requirements. Can perform audits and reviews, sign attest reports and represent clients before the IRS.
Enrolled Agent (EA)
Licensed by the IRS. Specializes in tax preparation, planning and representation, with unlimited practice rights before the IRS.
What Jay Excel Expert and Accounting Firm does
We are an accounting and bookkeeping firm, not a CPA firm. We handle the monthly work — bookkeeping, reconciliations, payroll support, month-end close and forecasting — and deliver tax-ready books to the CPA or Enrolled Agent who prepares your return. That combination is usually the most cost-effective setup for a small business: you pay bookkeeping rates for bookkeeping work, and tax rates only for tax work.
Bookkeeper, accountant or CPA FAQ
Not quite. A bookkeeper records and reconciles transactions. An accountant also adjusts, analyzes and reports on them. Many firms, including ours, do both.
In the US, only licensed CPAs and CPA firms can perform audits, reviews and other attest engagements and issue reports on financial statements. CPAs, Enrolled Agents and attorneys can also represent taxpayers before the IRS.
A tax professional licensed by the IRS after passing a three-part exam or through qualifying IRS experience. Enrolled Agents can prepare returns and represent taxpayers before the IRS in any state.
Most small businesses need a bookkeeper or accounting firm monthly and a CPA or Enrolled Agent once a year for tax returns and advice. You rarely need a CPA for day-to-day bookkeeping.
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