LUTZ BUSINESS INSIGHTS

 

The difference between bookkeepers and CPAs: which does your business need?

TAYLOR HOYT, SENIOR ACCOUNTANT
ACCOUNTING Interns: Laine SaBell and Larren Fear

If you’re a business owner, you know that keeping your finances in order is essential to your success. But what does that mean exactly? Do you need a bookkeeper, a CPA, or both? Does it make sense to hire a full-time professional or should you explore outsourcing your bookkeeping tasks to an accounting firm? In this post, we’ll break down the difference between bookkeepers and CPAs to help you decide which one is right for your business.

 

1. What bookkeepers do

Bookkeepers are responsible for maintaining financial records daily. This includes tracking income/expenses, recovering payments, and preparing reports. Bookkeepers must be detail-oriented, organized, and able to navigate accounting software. Some bookkeepers may also handle payroll and human resources tasks. Bookkeepers can be thought of as the handlers of day-to-day finances that flow through the business.

 

2. What CPAs do

Certified Public Accountants (CPAs) provide various financial services to individuals and businesses. The most common services include tax preparation, auditing, bookkeeping, and financial consulting. CPAs are also qualified to handle all the bookkeeping tasks mentioned above. In addition to these traditional services, CPAs may also specialize in areas such as forensic accounting, estate planning, or corporate finance. While a bookkeeper maintains financial records, CPAs analyze the records to provide suggestions and assist in business decisions.

The specific duties of a CPA vary depending on their area of specialization. However, all CPAs are responsible for ensuring that their clients comply with local, state, and federal laws. In addition to their professional responsibilities, CPAs also must uphold the highest ethical standards. As a result, CPAs play a vital role in maintaining the public’s trust in the financial system.

 

3. The benefits of having a bookkeeper and a CPA

Keeping track of your finances is essential to the success of your business. However, it can be challenging to keep up with all the paperwork and bookkeeping on your own. This is where a bookkeeper can be extremely helpful. A bookkeeper can keep track of all your financial transactions, prepare financial statements, and reconcile bank statements. In addition, a bookkeeper can help you stay organized and ensure that all your financial records are up to date.

While a bookkeeper can be a great asset to any business, there are some things that they cannot do. This is where a CPA comes in. A CPA can give you tax advice or prepare/file your tax return. In addition, they can help you plan for your business’s future by creating a financial forecast and evaluating the business’s financial status. While a CPA can perform all bookkeeping tasks, not all bookkeepers can perform CPA tasks.

As you can see, a bookkeeper and a CPA can be crucial team members. The bookkeeper and CPA work together to ensure the business is in a solid financial position.

 

4. How to choose the right professional for your business

Having a good handle on your finances is essential as a business owner. But between bookkeepers and CPAs, it can be hard to know whom to turn to for help. Here are a few things to keep in mind when choosing a professional:

  • What services do you need? A bookkeeper can handle invoicing, tracking expenses, and preparing financial reports. On the other hand, a CPA can provide tax/financial advice and guidance on complex financial issues.
  • What is your budget? Bookkeeping services tend to be less expensive than CPAs. However, you can always outsource your accounting instead of hiring a full-time employee. Lutz offers Client Advisory Services to help reduce your staffing expenses.

Choosing the right professional for your business depends on a variety of factors. By taking the time to consider your needs and budget, you can ensure that you get the help you need without overspending.

 

5. The cost of hiring a bookkeeper and/or CPA

A bookkeeper or CPA can save time and money by keeping your financial records in order. The cost of hiring a professional bookkeeper or CPA varies depending on the size and complexity of your business, but it’s typically a small percentage of your overall revenue. Without one, you could make costly errors in reporting income/expenses or miss out on important deductions and tax savings.

 

6. Outsourced Accounting

It may make sense to hire outside professionals to complete all or some of the bookkeeping and CPA duties listed above. If you are unable to hire a full-time employee, an outsourced accounting team can perform many accounting and finance functions, filling multiple roles simultaneously. They could act as a bookkeeper, controller, CFO, tax preparer, or any combination of roles you need for your businesses. The peace of mind and time saved is well worth the price.

 

Lutz Can Help!

There are many benefits of having a bookkeeper and CPA. From accurate financial records to tax advice and consulting, these professionals can help take your business to the next level. Make sure to contact us if you have any questions or want to learn more about our accounting services.

ABOUT THE AUTHOR

Taylor Hoyt

402.769.7046

thoyt@lutz.us

LINKEDIN

TAYLOR HOYT + SENIOR ACCOUNTANT

Taylor Hoyt is a Senior Accountant at Lutz. She began her career in 2019. She specializes in providing tax consulting and compliance services to clients in a variety of industries with a focus on individual and business income tax returns.

AREAS OF FOCUS
  • Tax
  • Accounting Consulting
AFFILIATIONS AND CREDENTIALS
  • Certified Public Accountant
EDUCATIONAL BACKGROUND
  • MPA, University of Nebraska, Lincoln, NE
  • Bachelor's in Accounting, University of Nebraska, Lincoln, NE

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