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Bookkeeper or CPA: Which is Better for Your Business?


Bookkeeper or CPA? Chances are, almost every small business owner grapples with this question at one time or another. One thing is certainly true. Lacking an accurate record of sales transactions, as well as the knowledge gleaned from assessing and analyzing that information, it's impossible to make informed decisions on the future growth of one's business.

In the past, there were clear-cut distinctions between the roles of bookkeepers and accountants. Many of those distinctions still apply today, but with the advent of sophisticated accounting and bookkeeping software, some lines have blurred. Nevertheless, every small business owner should have a clear understanding of how these two functions differ and which is more relevant for that business (and at what stage of growth).

Bookkeeper: Handling Daily Transactions

A bookkeeper's primary responsibility is recording day-to-day business transactions (sales, purchases, receipts, payments from customers, payment to vendors) in a consistent manner. This includes posting credits and debits, generating invoices, balancing general ledgers, and historical accounts, etc. Bookkeepers are charged with reconciling bank accounts, generating reports and preparing accurate financial statements.

Generally speaking, bookkeepers must have at least two years of experience, an associate's degree, and/or certification through organizations like AIPB (American Institute of Professional Bookkeepers).

A small business owner can, under certain circumstances, manage their own bookkeeping tasks. Using online accounting systems, they can record transactions and payments, issue invoices, and download bank and credit card information.

Accountant: Looking at the Big Picture

An accountant is charged with looking at a business's "big picture." Responsibilities include:

  • Analyzing operational costs
  • Performing audits
  • Conducting forensic accounting
  • Preparing financial reporting statements and records (tax returns, income statements, balance sheets)
  • Generating data for forecasts, trends in business, and opportunities for growth
  • Completing tax returns

To become a Certified Public Accountant (CPA), accountants are required to pass the Uniform Certified Public Accountant exam. They can also be accredited through AICPA (American Institute of Certified Public Accountants).

It's the accountant's role to advise business owners on future growth opportunities, including strategies for tax planning and forecasting, current marketplace conditions, and emerging trends. A good accountant is not afraid to tell you hard news, and bases his or her recommendations primarily on the company's comprehensive financial picture.

Working Together

Depending on the size of your small business, it may make sense to encourage collaboration between your bookkeeper and accountant. After all, their skills complement one another—the bookkeeper ensuring your daily transactional records are accurate and up to date, the CPA (whom you are more likely to meet with on a less frequent basis) interpreting and evaluating the information maintained by the bookkeeper.

Bookkeeper or CPA? The choice isn't necessarily between one or the other, but a decision on which to choose grows out of the type of industry your business is in, the number of employees, the quantity of fixed assets and inventory, etc. Certainly, as your business grows and the financial picture becomes more complex, you should have an experienced CPA on board to monitor and report on changing tax regulations and business trends.

Either way, it's important to have professionals you can depend on to keep the financial health of your business intact and help you explore future opportunities for growth.



This website contains articles posted for informational and educational value. Paychex is not responsible for information contained within any of these materials. Any opinions expressed within materials are not necessarily the opinion of, or supported by, Paychex. The information in these materials should not be considered legal or accounting advice, and it should not substitute for legal, accounting, and other professional advice where the facts and circumstances warrant.
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