Bookkeepers vs. CPAs: Make the Best Choice for your Business
As a group, small business owners are expert-level DIYers. But, even the most resourceful small business owners will eventually find themselves needing to bring in experts to help them manage their business finances. If you’re a small business owner navigating just this situation, then congratulations. This can be a pretty exciting time for a small business owner. After all, needing help managing business finances implies that your business is growing! However, while recognizing that it’s time to bring in help is a great first step, it’s a bit easy to stumble over precisely what kind of support is appropriate for your organization.
Do you need a bookkeeper? Maybe a CPA? Or could a new software solution be good enough? There are times and places for each of these options, but they aren’t interchangeable. Bookkeepers and CPAs can each be hugely helpful but will assist in different — albeit related — ways. Understanding the differences between them will ensure that you turn to the best option for your business.
WHAT IS A CPA?
A CPA is an accounting professional that is certified by a board and is legally allowed to prepare taxes. Good CPAs will make sure you and your business stay on the IRS’s good side — a huge selling point for any small business owners concerned with filing taxes correctly.Therelationship between business owner and CPA can be as involved as you want it to be. Do you need monthly financial oversight? You can certainly find a CPA ready to help. On the other hand, a CPA can also assist with occasional tax preparation tasks. It’s all about your needs.
WHAT IS A BOOKKEEPER?
Simply speaking, a bookkeeper is somebody who takes care of your day-to-day books. Bookkeepers make sure that your daily finances are organized and will alert you to any red flags or concerning trends. Organized books help you, as the business owner, really understand your revenue, which will help you make the best decisions for your business. Unlike CPAs, bookkeepers will not help you prepare or file tax returns. However, organized books will make it much easier for you to file yourself. While there are exceptions, bookkeepers generally don’t have as much education or training as CPAs and cost less as a result.
WHICH OPTION IS BEST FOR YOU? AKA: NAVIGATING THE GRAY AREA.
If you have one specific, straightforward need, then your choice should be easy. Need help with taxes? CPA. Monthly books a mess? Better call a bookkeeper. Bookkeeping software is another great solution for uncomplicated situations. There are plenty of good, reasonably priced software solutions available for purchase. If you have the free time and the confidence to tackle your own books, new software might be all you need.
But, many small business owners have multifaceted needs that live somewhere in the gray area between CPAs and bookkeepers. They need somebody to help with taxes and the books. Or, they need help to stay on top of invoicing and want expert help to strategically plan for the future. Or, they need an expert to help create a business plan and correctly register a new business with the IRS.
In these situations, business owners have a few options.Some larger accounting firms employ CPAs and bookkeepers and might be able to meet all your needs. Or, if your monthly books are relatively straightforward, a bookkeeping software and a CPA might be the best way to go. If you spend ten minutes googling, then you’ll find plenty of financial professionals that promise they can “do it all.” And, they might be able to deliver on that promise! But, here’s my best advice: DON’T LET THEM.
If you can afford it, the best option will always be a CPA and a bookkeeper — preferably from separate organizations. Create a world in which the two professionals are checking each other’s work. Not because you don’t trust them, or because they are bad at their jobs, but because independent review is way more likely to catch mistakes. And that’s a win for you and your business.
The bookkeepers at Office Accomplice are very familiar with the “gray area.” We can help you with everything from creating a business plan to advising you on how to strategically invest your dollars — while making sure your monthly books are clear and organized. Contact us to learn more about how we can support your small business.
