Archive July 31, 2020

Bookkeeper, Accountant or CPA

Do you need a Bookkeeper, Accountant or CPA?

What's the Difference? How to Choose?

If you spend too much time on data entry, feel unsure about the meaning of debits or credits, or you are wondering how you could be even more financially successful, you ought to seek the help of a financial professional.

 

Alicia sells Keys

Alicia sells key accessories. From keychains to key-hooks, she has a well-stocked inventory.  Her sales are strong, but Alicia really does not feel comfortable with the financial side of the business. Her cash flow varies, and she is not sure how to budget for the slow months. If she felt more comfortable with the financial side of the business, she wonders if her business would be more successful.

Laurence who runs a Non-profit focusing on saving fish from burning needs a different level of financial help.  He has a good understanding of the organization, its future and has even developed a plan to get there.  He just does not have enough time for the daily financial data entry.

Fishburn Prevention.Org

These business owners would benefit from hiring a supportive finance professional.

Data Entry for Financial Success

What’s the Difference between a Bookkeeper, Accountant and CPA?

Hire a bookkeeper if data entry is needed, recording general day-to-day transactions, bank reconciliations and compliance.  Bookkeepers supply limited analysis. Their main responsible is to record the financial transactions of the business.

The first step in understanding the financial success of your business is accurate data entry. When a bookkeeper is done the data pieces have been put into place.

Accountants are dependable strategic business partners. By looking for and highlighting trends they supply insight. They analyze, interpret, and guide. You will understand and feel confident with your financial decisions.

Accountants help you make perceptive financial decisions.

A CPA goes beyond bookkeepers and accountants.  After passing a rigorous exam and with proven experience they become licensed. To maintain their license, a CPA fulfills on-going continuing education requirements. They follow a code of ethics.

A CPA keeps up on the latest trend analysis, compliance issues and best business practices.

How to Choose

IF you want

  1. Info recorded and general compliance – BOOKKEEPER
  2. Insights into your data and how to take you to the next step of success – ACCOUNTANT
  3. You want all the above and extra confidence – CPA

Accountants and CPA’s both could provide you with a level of insight and knowledge, a CPA has gone the extra step.

Hiring a knowledgeable financial professional is not a guarantee of financial success, it is another step-in the direction of building success.

Based on what we just learned:

 

Alicia should hire an accountant, or a CPA. Alicia cares enough about the financial success of her business to realize she needs sound financial advice.

 

Laurence feels secure in understanding the financials of his organization, so a bookkeeper would be alright. Although, an accountant or CPA could prove to be a strong business partner. The CPA would deliver additional insights Laurence may have not yet thought of.

Financial Success
Hurray! Our books balance

What is a sound piece of financial advice you have received, or which you had known earlier?

Advisor, Consultant or Coach? What’s the Difference?

SUCCESS!

Advisors, consultants and coaches all exist to help you and/or your organization succeed. The relationship duration and focus varies. Consultants are project focused, an advisor guides and coaches support.

 

A consultant is called on to provide a solution to a specific short-term project. They have experience in solving for the problem you have.  Because of their experience, they’ve seen it/done it. Examples of consultant projects; developing a website, building out an accounting system, creating policies and procedures.

An advisor develops an on-going relationship and dispenses expert advice. Their expertise comes from skills and knowledge and experience. The depth of their subject knowledge is deep. They give advice and guidance through regular engagements. For instance, an advisor helps you to interpret and communicate financial results.

A coach teaches and guides you to develop or improve a skill. The successful coach knows how to nurture and hold you accountable.  Business Development and Sales, Employee Relations and management, are examples.

Is your current situation:

  • Project Specific – is there a tangible product expected at the end of the engagement – Consultant
  • On-going – continued support and guidance – Advisor
  • Outcome specific – skill improvement – Coach

How to Engage an Advisor, Consultant or Coach

taking notes

 

Pre-meeting prep

First and most important: identify your needs, expectations, and your definition of a successful relationship. The more specific you are in your thoughts, the better the outcome.

  1. I have
    • a specific project to complete
    • a question on how to _________
    • a need to improve my _____ skills
  2. I expect this person to
    • Be available and responsive
    • Be approachable
    • Be knowledgeable
  3. I would define this relationship to be a success if ______________
  4. To be complete by_____
During the meeting:
  1. Are they focused and listening?
  2. Does it feel like a conversation, a discussion of ideas and solutions?
  3. How’s the chemistry? Are you in-sync and comfortable with their style?
  4. Often a skilled advisor, consultant or coach will listen to what is NOT being said and will follow through on those underlying emotions.
  5. Will they become a partner in helping you solve for success?
What are their credentials
  1. Do they have the expertise, training or experience for this situation?
  2. Trust is a key trait; without trust will you really follow through and be successful.
  3. Are they up on the current trends, and developments in the industry?

 

This relationship is one critical piece of your toolkit to success.

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