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Bookkeeper, accountant or CPA: who does what?
In short
A bookkeeper records and reconciles your transactions every month. An accountant or tax preparer uses those books to prepare your tax returns and advise on tax. A CPA is an accountant with a state license. Most small businesses need a bookkeeper monthly and a tax preparer once a year, and the two work best together.
The bookkeeper: every month
A bookkeeper records what happened: every transaction categorized, every bank and card account reconciled to its statement, and monthly reports produced. The output is a set of books you can trust, and numbers you can make decisions from during the year.
The accountant or tax preparer: once a year, and for advice
An accountant or tax preparer takes your books and prepares your tax returns, works out estimated taxes, and advises on things like entity choice and deductions. Their work is faster, and usually cheaper, when the books arrive clean.
The CPA: an accountant with a license
A CPA (certified public accountant) has passed the CPA exam and holds a state license. CPAs can do things others can't, like audits, and are one of the groups allowed to represent you before the IRS. Many small businesses use a CPA or an enrolled agent for taxes.
Which do you need?
| Need | Who |
|---|---|
| Transactions categorized and accounts reconciled monthly | Bookkeeper |
| Monthly profit and loss and balance sheet | Bookkeeper |
| Business tax return and estimated taxes | Accountant, CPA or enrolled agent |
| Tax planning and entity advice | Accountant or CPA |
| A financial statement audit | CPA firm |
We're bookkeepers. We keep your books current every month and hand your tax preparer clean, reconciled books at year end. See what's included.
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