How is a bookkeeper different from an accountant (CPA)?

By - February 2, 2020

A bookkeeper maintains the daily and monthly books. Their duties may include:

  • Accounts Payable – the documentation and payment of bills you receive from vendors. This can also include preparing annual 1099s for subcontractors.
  • Accounts Receivable – the documentation, invoicing, and receipt of payment for services and goods you provide to customers. This may include preparing sales tax return filings.
  • Payroll – the documentation and payment for earnings paid out to your employees. This also includes preparing payroll tax filings and W-2s for employees.
  • Reconciliation – the balancing and settling of your accounts. The most common example is bank accounts, but this also includes credit card accounts, loan accounts, other credit accounts like PayPal, and statements received from vendors.

Certified Public Accountants (CPA) or Certified Tax Preparers (CTP) specialize in doing annual taxes. They understand the taxation codes for the Internal Revenue Service and Colorado Department of Revenue in great detail and focus the majority of their time on the year-end tax impact.

Many CPAs and CTPs do not provide bookkeeping themselves and outsource this function to bookkeepers, or they may have bookkeepers on staff. In many tax firms bookkeeping is done reactively for tax purposes.

Open Book Consulting specializes in a proactive approach to bookkeeping and encourages business owners (or their designated employee) to be involved in the bookkeeping process to some degree. We believe helping you understand your numbers enables you to make smarter business decisions all year long.