What’s the Difference Between a Bookkeeper and a CPA?

If you are a business owner, you have probably heard the terms bookkeeper and CPA thrown around when it comes to managing your finances. But what do they actually mean? And more importantly, which one does your business really need?

While both play important roles in keeping your finances healthy, they serve very different purposes. Understanding these differences will help you build the right financial support team and for many small businesses, that begins with a skilled bookkeeper.

What Does a Bookkeeper Do?

A bookkeeper handles the day-to-day financial recordkeeping for your business. They ensure that every transaction is recorded accurately and consistently, giving you a clear, real-time picture of your financial health.

Common bookkeeping responsibilities include:

• Recording income and expenses

• Categorizing transactions in accounting software

• Reconciling bank and credit card accounts

• Tracking accounts receivable (invoices) and accounts payable (bills)

• Producing monthly financial statements like Profit & Loss and Balance Sheets

A bookkeeper’s work is the foundation for everything else in your business’s finances. Without accurate, up-to-date books, you can’t make informed decisions — and your CPA’s job becomes much harder.

What Does a CPA Do?

A CPA (Certified Public Accountant) is an accountant who has passed rigorous licensing exams and met strict education and experience requirements. CPAs provide advanced financial and compliance services that go beyond standard accounting.

Common CPA responsibilities include:

• Preparing and filing business and personal tax returns

• Providing tax planning and strategies to minimize liability

• Offering financial consulting and business planning advice

• Representing clients before the IRS during audits or disputes

• Assisting with complex financial transactions and compliance issues

A CPA is a strategic advisor and compliance expert, helping you navigate the big-picture financial and tax requirements of running a business.

Bookkeeper vs. CPA: The Core Difference

While there’s some overlap, the distinction comes down to scope and timing:

• Bookkeepers work daily, keeping your records accurate, organized, and current.

• CPAs work at a higher level, often periodically, to handle taxes, compliance, and strategic financial planning.

Here’s the key: CPAs rely on accurate bookkeeping to do their job well. If your books are messy, incomplete, or out-of-date, even the most skilled CPA can’t provide accurate advice or prepare your taxes efficiently.

Why Most Small Business Owners Start with a Bookkeeper

Many owners think they need a CPA right away, but in reality, bookkeeping is the first step to building a strong financial system. Here’s why:

1. You’ll Always Know Your Numbers
   Bookkeepers keep your records updated so you know exactly where your business stands at any moment. Bookkeepers provide monthly or quarterly financial statements and help you understand them throughout the year. 

2. You Save Money on CPA Fees
   CPAs charge significantly more per hour than bookkeepers. Having clean books means your CPA spends less time fixing errors and more time on strategy.

3. Tax Season Becomes Simple
   When your financial data is accurate year-round, tax preparation is faster, smoother, less stressful, and less expensive.

4. Better Business Decisions
   Accurate monthly reports allow you to spot trends, manage cash flow, and plan for growth before problems arise.

5. More Time for You
   Delegating bookkeeping frees you up to focus on sales, customer service, and growing your business.

Final Thoughts

Bookkeepers and CPAs are both valuable partners, but they serve different purposes. Your bookkeeper manages the details of your financial day-to-day, while your CPA provides tax and strategic expertise based on those details.

The smartest approach for most small businesses?

• Hire a bookkeeper first to keep your financial records accurate and up-to-date.

• Work with a CPA when you need tax filing, compliance, or high-level financial advice.

At Eddington Financial Solutions, we are bookkeeping experts and certified QuickBooks Online (QBO) ProAdvisor’s. We help business owners get and stay financially organized so that when you do work with a CPA, you’re confident, prepared, and in control of your numbers.

If you’re ready to see how professional bookkeeping can save you time, reduce stress, and give you the clarity you need to grow your business, let’s talk. Click the schedule now button at the top of this page to book your free, no-obligation consultation. We’ll discuss your goals, review your current bookkeeping process, and explore how our services can help you run your business with confidence.