CPA vs Accountant: 5 Big Questions To Consider

cpa vs accountant

Both of these paths are viable long-term career options for aspiring accounting professionals. Let’s dive deeper into the differences so you can choose which path is right for you. For professionals who want to enter the accounting field, it’s common to wonder what the difference is between an accountant and a CPA. While it may seem that people use these terms interchangeably, there are distinctions between these professionals.

When someone has completed the requirements set out by the CPA program, they can work in most roles that provide financial services, whether at the personal or business level or in the private or public sector. They may specialize in areas such as financial reporting, auditing, taxation, and of course, accounting. CPAs are required to complete at least 150 college credit hours to qualify for a CPA license, compared to the standard 120 credits required to earn a bachelor’s degree. Some accounting professionals take advantage of earning a master’s degree in accounting to earn these additional credits, further advancing their credentials in the eyes of employers. According to the BLS, a bachelor’s degree in accounting or a related field is typically needed to pursue career opportunities as an accountant or auditor. If you have earned a bachelor’s degree in accounting or business, you may be able to pursue career opportunities as an accountant.

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CPAs also must pass the Uniform CPA Exam, which tests their knowledge of accounting and tax laws. In the cases of both tax and financial advisors, you’ll want to look for licensed professionals. Financial advisors, for example, should be licensed by the financial regulator in their state, as well as the Financial Industry Regulatory Authority (FINRA). Although there are exceptions to the rule, generally speaking, if you need help with financial planning and investments, it’s best to work with a certified financial advisor. If you’re looking for help preparing a tax return or understanding the tax implications of a particular financial decision, an accountant or CPA is usually a better choice. Financial advisor is a generic term used to describe financial professionals who are licensed to provide financial planning and investment advice.

cpa vs accountant

Mary Girsch-Bock is the expert on accounting software and payroll software for The Ascent. So, while you won’t always need a CPA, understanding that there are times when you will need one is important for all small business list of international accounting standards owners. The expertise of a CPA can also be helpful in the early stages of your business by providing advice and guidance on everything from initial business structure to asset purchase and depreciation methodology.

Key Hard Skills for CPAs

An accountant hired on a project-by-project basis to manage and oversee a specific business project. Tasks include management, approving expenses, project invoicing, job costing, and maintaining budgets. Additionally, a bookkeeper can’t file your taxes, whereas an accountant can file your personal and business tax returns.

  • A bookkeeper is an individual who is in charge of maintaining a business’s books.
  • It’s always best to check your state’s rules and regulations before starting your CPE.
  • If you’re looking for help preparing a tax return or understanding the tax implications of a particular financial decision, an accountant or CPA is usually a better choice.

For example, if your ending utility expense account in the general ledger is higher or lower than expected, it’s the accountant’s job to figure out why. There are a few more things that CPAs typically do that are different from the tasks that accountants typically perform. However, there are diverse career paths within the accounting profession. This guide will help you differentiate between a CPA and an accountant, as well as answer pressing questions about how these designations impact an accountant’s career path. The differences between a CPA vs. an accountant also extend to their job responsibilities, although there is some overlap.

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If you already use specific tools to manage your books, you’ll want to discuss those tools with any bookkeepers or accountants you consider working with to ensure they’re familiar with them. The largest difference between accounting and bookkeeping roles is the required credentials, or academic qualifications, for each. Most importantly, your accountant is a valued advisor who can help you with important decision-making. If you’re considering purchasing new equipment or taking out a line of credit, for example, your accountant can help you determine the financial ramifications your decision can have.

  • Bureau of Labor Statistics, there were 1.4 million accountants and auditors working in the United States as of May 2018.
  • On the other hand, while most people think of an accountant only in the context of preparing tax returns and providing tax advice, they also can often provide guidance on investments and household finances.
  • The editorial content on this page is not provided by any of the companies mentioned and has not been reviewed, approved or otherwise endorsed by any of these entities.
  • Students should complete Applied Probability and Statistics or its equivalent prior to engaging in Applied Algebra.

The goal of accounting is to gain an understanding of your business’s financial state and use that information to help your business succeed and plan for the future. Choosing the right professional to handle your finances is the key to success. A fiduciary is an individual or an organization that has the legal authority to act on behalf of others. Let’s get a more detailed look into their differences and what they mean. The Association of International Certified Public Accountants (AICPA) sets the standards and qualifications for the CPA professional designation. Each state has a board of accountancy that sets the specific standards for the state.

Accountants and CPAs Defined

All CPAs are accountants, however not all accountants are CPAs—that’s because factors such as licensing, their function, skills, and more differ them. Some accountants offer guidance on how to cut costs, increase revenue and maximize profitability. One important quality in being a successful CPA is genuinely caring about your clients and their businesses. I love working with not-for-profit clients for that very reason — I feel like I’m really contributing to their mission by helping them have good financial information on which to make smart business decisions.

cpa vs accountant

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