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  • Writer's pictureRachael King

Bookkeeper versus CPA: What You Need to Know



A woman working on a laptop and calculator on a desk.  There are financial papers as well.

Choosing between a bookkeeper and a Certified Public Accountant (CPA) will always depend on your unique, and often complex, business, and personal needs. However, there are a few things to think about that may help solidify your decision. 





Bookkeeper versus CPA: Reasons to Choose a Bookkeeper


Day-to-Day Financial Transactions:

  • If you need someone to manage your daily financial transactions, such as recording sales, paying bills, and handling invoices, a bookkeeper is a great choice.

Cost-Effective:

  • If you are a small business or startup with a relatively straightforward financial operation, hiring a bookkeeper can save you money. Bookkeepers offer much-needed services at a lower rate than a CPA firm.

Financial Organization and Record-Keeping: 

  • Bookkeepers will keep your financial records organized, ensuring that every transaction is accurately logged. This is a must-have for the smooth operation of your business. As a bonus, this level of organization lays the groundwork for any required financial analysis or auditing that you may have.

Cash Flow Management: 

  • They play a big role in managing your cash flow, ensuring your business does not run into cash shortages. Bookkeepers help you maintain a healthy cash flow by closely monitoring money in and money out.

Preparation for Tax Season: 

  • Although bookkeepers do not file taxes, their meticulous record-keeping throughout the year makes the tax preparation process much smoother (which is always nice.) An accountant or CPA can then efficiently prepare and file your tax returns using these well-organized records, in many cases saving you money!

Bookkeeper versus CPA: Reasons to Choose a CPA


Certification and Expertise: 

  • CPAs have undergone rigorous exams and met specific education and experience requirements set by their state. This certification gives them a deep understanding of tax laws, financial regulations, and intricate accounting principles, suitable for handling sophisticated financial needs.

Tax Planning and Filing: 

  • CPAs are authorized to prepare and file tax returns. They can also offer strategic tax planning advice, helping you maximize tax savings while ensuring compliance with tax laws.

Financial Analysis and Advice: 

  • Beyond day-to-day bookkeeping, CPAs can provide comprehensive financial analysis and valuable insights and advice on financial planning, investment decisions, and business growth strategies.

Audit and Assurance Services:

  • If your business requires an audit, review, or compilation of financial statements for investors, lenders, or regulatory compliance, a CPA is qualified to perform these services. Their expertise ensures that your financial statements accurately reflect your business's financial status.

Risk Management and Compliance: 

  • CPAs can help you navigate the complex regulatory environment, ensuring compliance with financial regulations. They can also assist in risk management, helping you to identify, assess, and mitigate financial risks.

The outcome of the conversation around Bookkeeper versus CPA largely hinges on the intricacy of your financial needs, the level of expertise required, and the specific services you need for your business or personal finances.  If you are not sure, a good plan is to book a consultation appointment with a CPA and a Bookkeeper and see which level of service suits your needs and budget.

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