Bookkeeper vs CPA is the wrong contest, because they do different jobs, but it is the right question for an owner who is about to pay one of them to do the other's work. A bookkeeper records and reconciles every month. A CPA, a certified public accountant, prepares returns, signs things a bookkeeper cannot, and advises. Most small businesses need both, at different times of the year and at very different rates. This page sets out who does what, when you need each, and how to avoid the common mistake of paying CPA rates for monthly bookkeeping.
What a bookkeeper does
Codes every bank and card transaction, reconciles every account to its statement each month, records the invoices and bills, posts the payroll journals a payroll provider produces, and hands over a profit and loss, a balance sheet and the aged receivables and payables at month end. The unit is the month; the output is books that agree with the bank. The scope sheet on this site turns your counts into the hours that takes.
What a CPA does
Works from those books to prepare the year-end accounts and the tax returns, signs off things that need a licensed accountant, represents you to the IRS if it comes to that, and advises on structure, tax and finance. The unit is the year, plus whatever advice you ask for. A CPA is licensed by the state and carries a professional obligation that a bookkeeper does not, which is part of what the rate pays for.
When you need one, the other, or both
Every business that files a return benefits from a CPA at year end. Every business with more transactions than the owner can reconcile in an evening benefits from a bookkeeper in the month. The businesses that pay too much are the ones that use the CPA for both, at the CPA's rate; the ones that pay too little are the ones that use neither and give the CPA a shoebox in the spring. The right shape for most small businesses is a bookkeeper monthly and a CPA annually, talking to each other directly.
What each should cost, and how to check
The bookkeeping fee is hours at a bookkeeper's rate, and the pricing calculator on this site shows what your counts imply. The CPA's fee is a year-end price plus advice by the hour. If a single quote covers both, ask for the split; if the monthly half is priced at the CPA's rate, you are paying a licensed professional to code transactions, and you can do better.
Questions people ask about bookkeeper vs cpa
Can a bookkeeper do my taxes?
Not as a bookkeeper. Some bookkeepers are also enrolled agents or tax preparers, and then they can, but the quote should say which hat they are wearing. A CPA can always prepare the return.
Can a CPA do my bookkeeping?
Yes, and many CPA practices have a bookkeeping team that does it at a bookkeeping rate. The problem is only when the CPA does it personally at the CPA's rate.
Does a bookkeeper need to be a CPA?
No. Bookkeeping is not licensed in the United States and a CPA licence is for accounting. A good bookkeeper and a good CPA are different skills, and a business usually needs both.
Do the bookkeeper and the CPA need to talk to each other?
Yes, directly, at year end at least. Agree it in advance; an owner relaying questions between the two is slow and expensive, and errors live in the gap.