People have a misconception that accountants and CPAs have the same job description and roles. But this is not true; there is a difference between them. Both of these may sound the same as they work with financial data, but their roles, duties, and work scope differ within an organization.
We will let you know in detail how they are different.
Who is an accountant?
An accountant is the one who prepares financial statements and records your bank transactions. They look after your bank transaction, keep track of all of these transactions and save them in the company’s record. So their job description also includes bookkeeping. Their bookkeeping helps owners and managers to make better decisions.
Another job of an accountant is to prepare tax documents as he is the one who keeps the books, so he is aware of all the details. He already knows everything, so he can play well with the numbers.
Who is CPA (Certified Public Accountant)?
Coming towards a CPA, he is the one who is well aware of the duties that an accountant performs, but he has the edge over accountants in terms of education and experience. CPA has to pass the 4 part exams considered the toughest exams with a pass ratio of 50%.
Also, he has a license to maintain by completing 40 hours of CPE (Consulting Professional Education). This is to ensure this CPA has hands-on latest accounting and taxation practices.
CPAs can do more due to their legal designation. They provide assistance in IRS tax disputes, render an option on financial statement audit, and much more. Only a CPA (or lawyer) can do this for you.
DIFFERENCE ACCOUNTANT VS. CPA
After reading the about description, I think many things will be clear to you. Now from a legal point of view, a CPA has more weightage than an accountant. He is more professional and experienced. They are certified persons.
On the other hand, an accountant is the one who looks after your books and financial records. In many cases, the owners are looking at their accounts in the case of startups so they can be termed as an accountant, even with no formal accounting education and experience.
Which one is for your business?
It depends on your business needs and how you want to grow your organization. In many cases, an accountant is enough for a business unless you have issues with tax or IRS concerns.
An accountant can simply maintain your books and file your tax, but a CPA can do more by performing complete tax planning.
An accountant can also work if you have no issues with the audits, but if you have, you must hire a CPA as a CPA is always above an accountant. Also, remember a CPA charges you more according to his experience and professionalism. Account rate is usually lower than CPA even if he is a qualified accountant.
I hope you are now well aware of their difference. Now it’s your choice which one fits your business requirements and budget. At Startup Business Accounting, we have both in-house accountants and CPAs according to your business requirements. Contact us today to learn more!
