For many people who have just started their studies, they might be wondering whether it is worth putting in the extra time, effort and financial investment into furthering their education. They want to know whether the reward is more than just an impressive-looking certificate to hang on a wall behind their desk. So, we have provided a brief overview of a CPA vs Accountant vs Bookkeeper. We will list these from the least to most prestigious types.
What is a bookkeeper?
A bookkeeper, or bookkeeping clerk, is someone who is responsible for balancing all of the transactions in their company’s general ledger. This role does not require any type of certification or tertiary education. Although they only need to have a high school certification, it can help their marketability to have some sort of qualification to their name.
What a bookkeeper can do:
- Recording all transaction types in the company ledger, including purchases, expenditures, depreciation of assets and appreciation of assets.
- Issue invoices
- Prepare and file VAT Returns
- Calculate and issue payroll checks
- Check financial records for accuracy
- File taxes and forms for sole traders
- Pursue debtors
- Computer literacy
- Spreadsheet knowledge
- Attention to detail
- High levels of focus and concentration
- Problem-solving skills
- Good communication
According to Indeed.com, the average base salary of an accountant (as of November 2021) was $38,707 at $18.98 per hour.
What is an accountant?
An accountant is someone who has received a Bachelor’s degree or higher in either Accountancy or a similar field. Accountants are not necessarily certified, so while all CPAs, Chartered Accountants (CAs) and similarly licensed professionals are accounts, not all accountants are CAs. Here, we will be describing the role of a non-licensed accountant.
Similar to a bookkeeper, they are also responsible for balancing financial accounts. However, the scope of their work is broader than a bookkeeper. As such, they cannot work for any public company. However, due to their level of education, they have a broader role in the financial running and auditing of the company.
What an accountant can do:
- Conduct annual audits
- Assist in budget preparation
- Ensure that tax preparation complies with federal regulations
- Handle day-to-day financial records of the company
- Can prepare tax returns and financial audits, but cannot sign them
- Advise in budget plans and financial strategies
- Same as bookkeeper
- Usually holds tertiary degree in accountancy or similar
According to Indeed.com, the average base salary of an accountant (as of July 2022) was $59,335 at $24.98 per hour.
What is a CPA?
A Certified Public Accountant (CPA) is someone who has not only acquired an Accountancy degree, but has also undergone all of the extra requirements to earn their CPA license. This entailed meeting the 150 College Credit requirement, the state board’s work requirement, writing the AICPA Ethics Exam if necessary and passing all four parts of the Uniform CPA Exam. Once this is done, they will receive their CPA license from the American Institute of Certified Public Accountants (AICPA.) This license is state-specific.
What a CPA can do:
- Prepare and sign tax returns
- Prepare and sign audited financial statements
- Can represent taxpayers to the IRS
- Financial adviser to company
- Same as bookkeeper
- Holds Bachelor’s degree in Accountancy or similar
- CPA License from NASBA
According to Indeed.com, the average salary of a CPA (as of November 2021) was $81,312 at $34.83 per hour.