A lot goes on behind the scenes when running a business, particularly when referring to the financial aspects. Bookkeepers and Certified Public Accountants (CPA) play an essential role in the financial health of your business. Often these two roles are believed to be one and the same. Although we share common goals, we support businesses in different phases of the financial cycle. Today, I’ll go over the primary differences between a CPA and a bookkeeper.

What is the Role of a Bookkeeper? 

A bookkeeper will help you with proper recording of daily transactions in a consistent and accurate way. We help you avoid unnecessary tax liabilities and are a key component to building a financially successful business.  

Primary functions of bookkeeping include: 

  • Recording financial transactions 
  • Reconciling all bank and credit card accounts on a monthly basis 
  • Periodic reconciliation of balance sheet accounts 
  • Posting journal entries 
  • Producing and issuing invoices to customers
  • Monitoring accounts receivables 
  • Processing cash receipts 
  • Preparing and issuing monthly financial reports 
  • Processing periodic payroll in a timely manner 
  • Maintaining the Chart of Accounts 

One of the main components of bookkeeping is maintaining the general ledger – a basic document where a bookkeeper records the amounts from sale and expenses, also known as posting. At Bookkeeping Geeks, we can create ledgers with specialized software.  We are QuickBooks Online certified to seamlessly manage your bookkeeping needs. We are also a Certified Licensee of the Pure Bookkeeping System (PBS) and we take great pride in our work. 

The Role of a CPA 

Once I’ve processed all the receipts and invoices, your Certified Public Accountant (CPA) will take this financial information to produce financial models for strategic tax planning and financial forecasting.  

Your CPA can typically support your business by: 

  • Preparing adjusting entries (expenses that have not yet to be recorded in the bookkeeping process) 
  • Preparing a company’s financial statements  
  • Analyzing the costs of daily operations 
  • Completing income tax returns 
  • Helping the business owner understand the impact of certain financial decisions 

Certified Public Accountants provide reports to business owners, so they have a better understanding of actual profitability and increased awareness of cash flow. This information comes from the bookkeeper’s ledger which is turned into statements that show a bigger picture of the business.  

When to Use a Bookkeeper 

Bookkeeping is more administrative and concerned with correctly recording all financial transactions. This is key to knowing the true shape of your business.  

Your Accountant will base their financial insights on the information provided by the bookkeeper.  Organized and properly balanced financial records provided by the bookkeeper paired with a CPA’s smart financial strategy contribute to the long-term success of a business. Investing in a bookkeeper or an accountant (or both) can most certainly help your small business grow.  

At Bookkeeping Geeks, we provide small businesses in the Tampa Bay area with organized and accurate bookkeeping services. We work as a liaison between the owner and the accountant and together we’ll build your business. For more information on our services, please call Dorothy Harvey today at (813) 515-0216.