The Difference Between a Bookkeeper, Accountant and Certified Public Accountant

It is helpful for you to understand the differences in educational backgrounds and capabilities when you are looking for someone to assist you with your accounting, tax or financial planning needs.

 Bookkeeper:

A bookkeeper is responsible for recording of financial transactions. Typically, bookkeepers have two years of practical experience or an associate’s degree. Usually, the bookkeeper’s work is overseen by either an accountant or the small business owner whose books they are doing.

 Accountant:

To qualify for the title of accountant, an individual must generally have a bachelor’s degree in accounting. An accountant is responsible for interpreting, classifying, analyzing, reporting and summarizing financial data. For those that don’t have a specific degree in accounting, finance degrees are often considered an adequate substitute.  Services provided by an accountant include tax advice and financial statement preparation. 

Certified Public Accountant:

A CPA is an accountant who has met additional requirements to verify their knowledge, competency and professionalism.  These requirements include:

 1.    Passing a four part, multi day exam.

2.    Having one year of verifiable industry experience supervised by another CPA.

3.    Completing five years of college credits.

4.    Obtaining 40 hours per year of ongoing professional education.

5.    CPA’s are fiduciaries with a legal duty and power to act on behalf of and in the best interest of their clients.

6.    CPA’s are also expected to follow a strict code of ethics and meet professional standards to maintain their certification.

 A CPA has shown through the credentialing process that they have a holistic knowledge of accounting as it relates to the other fields of business. A good CPA should not only be able to do the accounting work but provide beneficial recommendations on how to structure your business or personal finances.