Which Should You Work With, When, And Why – Accountant, CPA, Bookkeeper

I had to drop a truth bomb and spread some knowledge because I can’t tell you how many times I’ve been asked the question…

  • What’s the difference between an Accountant, CPA, Bookkeeper, and Tax Preparer?
  • Do I need them all?
  • And, which do I hire first?

I want to share a story with you about one of my clients because the message is in the story and it’s usually more powerful and impactful than just the content. But don’t worry you’re going to get straight up no chaser content on the matter. Here’s her story…

Sandy, started her business with the same hopes and dreams as most entrepreneurs. She wants to quit her job and change the game for herself and her family. She wanted to leave a new legacy for her family.

Sandy did all the right things. She learned all about marketing, sales, and everything else she thought she needed to know. Sandy even got a coach. She covered all the bases on everything she felt she needed to know to make money.

Yet, the one thing Sandy forgot, that is the bloodline of her business, is learning about tracking her money. Now Sandy’s not alone. All the things Sandy was doing to make money cost, there were expenses attached to most of those activities. Unfortunately, she didn’t even think about tracking those expenses.

After being in business for seven months, Sandy attended a live workshop and during lunch she chatted with Quinn.

They discussed the last segment of training which lead to another conversation and Sandy learned that Quinn had a bookkeeper and he was tracking his money daily.

Maybe you’re like Sandy don’t even have a clue as to what’s a bookkeeper. She’d heard the phrase bookkeeper, accountant, CPA, and tax preparer, but they all seemed to run together with her.

I mean, can you relate? I’ve talked to hundreds of entrepreneurs over the years and they didn’t have a clue as to the difference between a bookkeeper, accountant, CPA, and tax preparer either.

Once they did hear those buzz words, their question was “what’s the difference and which do I hire first”.

You need them all. And once I explain the role each play in supporting your business, you’ll have a better understanding how each will support you in your business when you need them, and how often.

  • Bookkeeper: I record your daily transactions, reconcile your accounts, run financial reports, help with budgeting and cash flow projections, accounts receivables / payables, job costing, inventory tracking, year-end tax prep, W-2 and 1099 reports, and profit and growth strategies (FYI…I’m not your average bookkeeper:))
  • Accountant / CPA: my accountant offers financial advice, tax savings strategies, and tax preparation
  • Tax Advisor: provide tax filing services

Here’s the thing. Being a bookkeeper doesn’t mean that I can’t do your taxes or being a tax preparer doesn’t mean I can’t be a bookkeeper. You see in college, depending on your major, you learn them all: bookkeeping, accounting, financial management and tax preparation.

Many people in these industries are like me, they specialize in an area they enjoy. For me that’s bookkeeping. I love numbers and my weapon of choice is QuickBooks. I PIMP QuickBooks! I make it do what I want it to do, as I do for my clients too.

I can do them all, but I enjoy bookkeeping. I love to see the impact and transformation that happens with my clients in their lives and business. It’s truly amazing.

So which do you need? You ask. My answer is – you need someone to do them all.

  1. Bookkeeper to track your money
  2. Accountant / CPA to advise you on financial matters and prepare taxes
  3. Tax Preparer to prepare your taxes

Here’s how you will work with your financial team. You’ll work with your:

  • Bookkeeper on a monthly bases
  • Accountant / CPA at a minimum you should meet quarterly
  • Tax Preparer once a year at tax time

As you can see you have options on which you hire to do what. I personally, like to keep things separate and I’ll share why in another post.

The first step for you is to get your bookkeeping in order and caught up. Either do it yourself or hire a bookkeeper.