What is the difference between a Bookkeeper, Accountant and Consultant? There can be many varied lines and crossovers on the services that each offer and what a service provider refers to themselves as. So how do you know? The key is understanding what you need in addition to what the service provider can provide to you.
I want to start off with just giving some generalizations about each. Please understand this won’t be an Always or Never kind of situation as each service provider may tweak their offerings and the way they refer to the services they offer so I’ll just go with my 20+ years of experience and give you some generalizations. The key as always is to do your homework and find the best fit for you, regardless of their title.
According to Wikipedia:
A bookkeeper (or book-keeper) is a person who records the day-to-day financial transactions of a business. He or she is usually responsible for writing the daybooks, which contain records of purchases, sales, receipts, and payments. The bookkeeper is responsible for ensuring that all transactions are recorded in the correct daybook, supplier’s ledger, customer ledger, and general ledger; an accountant can then create reports from the information concerning the financial transactions recorded by the bookkeeper.
A consultant is usually an expert or an experienced professional in a specific field and has a wide knowledge of the subject matter…By hiring a consultant, clients have access to deeper levels of expertise than would be financially feasible for them to retain in-house on a long-term basis. As well, clients can control their expenditures on consulting services by only purchasing as much services from the outside consultant as desired.
Does this help you? Not sure? Here’s how I would expand upon it.
Typically bookkeepers are doing the initial data entry of the company’s transactions. They may or may not be doing analysis along with the data entry, depending on their knowledge and skill set. I have encountered bookkeepers with years of experience that are quite knowledgeable but don’t have the accounting degree and therefore do not refer to themselves as accountants. However, I’ve also been on the other side of the fence with people who refer to themselves as accountants and can’t really analyze their way out of a paper bag. They may be book smart but don’t have much real world experience. So don’t be attracted or deterred just by the title. As well, some states don’t let you say you are an accountant unless you are a CPA (for example Texas) and you don’t need to have a CPA to be an awesome accountant.
The key is looking for what you specifically need in the person(s) you are looking to work with.
Are you looking for someone to just do the daily entry of data?
Someone to prepare financials and be able to analyze how your company is doing compared to others in your industry?
Someone who can be able to encompass both these areas along with the ability to guide you through the upcoming waters and ensure you are able to navigate to your fullest potential?
Also realize the pay scale will be quite different for the professionals that you work with based on their skill set too. You don’t want to overpay for skills you don’t need, but even worse, you don’t want to underpay and not get the help you truly need. Typically in our experience, we will see our clients work with varying levels of these professionals as one size/person does not fit all.
An ideal situation is that businesses are having someone with bookkeeping skills do the initial data work who then works closely with an accountant who oversees this data entry and provides them guidance with certain areas that may be out of the normal every day business environment. That accountant then may work with their outside tax professional. The accountant may also be able to expand beyond just the creation and review of reports to help them with areas such as goal setting, budgets, business plan expansion, financial forecasting, etc. into more of a consultant role.
The reason we refer to ourselves here at RPPC Inc as Accounting and QuickBooks Consultants is that we not only know how to do the basic data entry, analyze financials and prepare reports and recommendations but we also work closely with our clients to assess the bigger picture. What is happening in our client’s industries, both local and national, as well as the general economy and what do we need to do to help ensure that we operate at our most profitable capacity with good cash flow. The additional frosting on the cupcake is that we have ran our own small businesses in a variety of industries and know that sometimes a “by the book” approach doesn’t always work. You have to have a little risk taking as an entrepreneur and be able to pull from the various experiences to navigate the tricky waters. Do you want to work with someone who does it only as they were taught or do you want someone who can take that education, personal and professional work experience and make it work for you? That’s why working with RPPC Inc makes a difference…we are so much more than “just” a bookkeeper or accountant.