Accountant VS Bookkeeper VS CPA

Let’s start this off by talking about the difference between accounting or accountant vs bookkeeping or a bookkeeper. The terms are often used interchangeably by those who are not in the profession. But they are in fact very different.

The act of recording financial transactions can be performed by an accountant or a bookkeeper, however depending on what state you are standing in you may not be able to call yourself an accountant. This is important to note because some states do not allow you to refer to yourself as an accountant unless you are a CPA; even if your job title is accountant and/or you have an accounting degree. 

That being said, within the profession, there is an actual distinction between the three based on the duties and tasks performed. I’m going to explain them in the order of bookkeeper, accountant and then CPA.

A bookkeeper is responsible for recording the day-to-day transactions within a business. This person may also process payroll, reconcile accounts and generate financial statements. Typically this person is not capable of providing higher level advisory services such as financial analysis, budgeting and forecasting. For this reason, a bookkeeper is not considered an accountant.

By not capable, I mean does not know how or has not had the experience with doing so. Not that they are unable. This is one of the things that differentiates this programs from others. Because in this program you will learn these things.

An accountant, on the other hand, can be a bookkeeper because they can do everything the bookkeeper does plus those higher level services. This person also will likely have some formal education such as an accounting degree.

A Certified Public Accountant, CPA, can be both a bookkeeper and an accountant. They have not only gone to school and obtained a degree, but they have also received a state license. They are also able to sign tax returns and represent people in the state they are licensed in as well as prepare and provide audited financial statements.

Now as I said, within the industry all three of these titles are different, but it’s my belief that if a bookkeeper is trained in accounting and not just in how to use a software program, they can serve as an accountant or obtain an accounting job. 

One thing I like to always say is that a CPA can be a bookkeeper or an accountant but a bookkeeper or accountant cannot be a CPA. But I am not here to teach you how to be an accountant. I am here to teach you to be a rockstar bookkeeper.

You will meet and find people who believe differently all around but their thoughts and opinions don’t matter. Just make sure you are in compliance with the rules of the state you live in.