THERE'S MORE THAN ONE TYPE OF ACCOUNTANT?
What is an accountant? Webster’s Dictionary describes it as: “one who is skilled in the practice of accounting or who is in charge of public or private accounts.” (1) The most recognized accountant is a CPA (Certified Public Accountant), but there are other professionals that fall within the broad “accountant” designation. Before hiring a new accounting professional, make sure you know what level of service you need. Here are a few common types of accountant roles, and a generalized description of each:
Bookkeeper: This professional’s primary task is data entry. An experienced bookkeeper will know all aspects of accounts payable, accounts receivable, and a basic understanding of debits/credits. The hourly rate for bookkeepers can range from approximately $20-$50+ per hour depending on their experience level and certifications.
Accountant: A CPA is always an accountant, but an accountant is not always a CPA. This professional’s primary task is monthly/quarterly financial review and reconciliation, data analytics, and reporting. Many companies will find it useful to have an in-house bookkeeper, as well as an outsourced accountant for their monthly or quarterly review and reporting needs. An accountant should have a wide range of experience with accounting, and a comprehensive knowledge of how financial information fits into the reports. The hourly rate for accountants can range between approximately $50-80+ per hour.
CPA: The Certified Public Accountant is the most recognized accounting designation. Depending on the CPA’s preference, they often focus on tax preparation and strategy, public accounting, or auditing. Many people employ a CPA for tax preparation or during an audit, expecting the highest level of expertise and service. The education and certification component for becoming a CPA is rigorous, and this is reflected in their fees. A CPA may charge approximately $200-450+ per hour.
CMA: The Certified Management Accountant is a lesser recognized accounting credential. While CPA’s primarily focus on what a company has already done in the past for tax purposes, CMAs focus on the present internal operations and the future financial status. They primarily work with operational accounting, budgeting, and forecasting in order to provide useful information and strategic plans for the current period. You will often see CMAs serving as Controllers and CFOs, though this is certainly not always the case. Their hourly rate can be anywhere between $200-450+ per hour.
These are only a few of the varieties of accountant roles that exist. Depending on your company’s needs you may want to employ an accountant with a specialty (such as a forensic accountant, cost accountant, or investment accountant, etc.). Make sure to analyze your company’s needs prior to hiring a new accounting professional. If you can afford to employ more than one type of accountant, the variety of strategic information they can provide can be invaluable.
N. B. Please note that calling oneself an accountant without having a CPA designation can be quite a fiery topic in the financial world. In some states, it’s even against the law to call yourself a CPA without a CPA designation. If you do not have a CPA credetial, never represent yourself as a CPA.
(1) https://www.merriam-webster.com/dictionary/accountant
Extra resources:
https://www.rasmussen.edu/degrees/business/blog/types-of-accountants-who-do-more-than-taxes/
http://blog.ignitespot.com/5-types-of-accountants-you-need
Writer: Heather D. Richard