Which accounting professional does my business need?
There is much confusion over what type of services are offered by which type of accounting professional. The more common types of professionals that are used interchangeably are bookkeeper, accountant and tax accountant. While the services they each offer do build upon each other, they each offer their own type of services. Below is a list of services that each type of professional may offer. This will assist in deciding which type of professional you need based upon the needs of your business.
Bookkeeper- A bookkeeper will record financial transactions for the business books. This person normally keeps the day to day and makes sure the transactions are kept in order. They may summarize data on financial reports. They lay the groundwork for accountants.
Accountant- An accountant will review, analyze and interpret the financial reports of the company. They can make sure the reports are following financial standards and requirements. They can act as advisors to business owners to assist in making informed business decisions. They can provide management, budgeting and forecasting services. They can provide both bookkeeping and accountant services. They work in conjunction with tax accountants.
Tax Accountants/CPA- A tax accountant/CPA (certified public accountant) will provide services to review financial reports and prepare taxes for the business. They can make sure that the business is compliant in regards to tax policies and requirements. A firm will be the business liaison for tax related matters with the tax government authorities such as the Internal Revenue Service. They will work with the business bookkeeper and/or accountant.
Keep in mind that an accounting firm may provide all three professional services above. A business may also choose to have a bookkeeper in house and outsource their accountant and only have a tax accountant once a year, at tax time. It is important that a business have an accountant and a tax accountant, as a business owner you want to know how your business is doing not just at tax time but throughout the year.