The Choice: CPA, Bookkeeper, Software?

Let's explore the benefits of each option to find the best fit for your specific financial needs.

Bookkeeping Software has become an integral part of any small business.

The ease of use and popularity of software suites like QuickBooks allow most small business owners to handle some degree of bookkeeping, regardless of their accounting knowledge. At best, this works well during the early stages of growth. At worst, a business owner may believe they’re entering financial information correctly when they are not. In either case, as the business grows, so does the complexity of its tax planning and accounting needs. Eventually, there comes a critical point when a business owner must consider outsourcing all or part of their bookkeeping.

For example, imagine the following:

You realize that you are spending more time dealing with bookkeeping instead of with customers and vendors
You find yourself questioning whether or not you’re entering items in the right expense account (a very common error!)
You end the year thinking you made a profit only to find out you have less in your bank than when you started and do not understand why
You want advanced reports that you are unsure of how to produce/may not be available by default from your off-the-shelf bookkeeping program
You overstate your profits, and as a result, pay higher taxes on incorrect numbers

If any of the situations above resonate with you, it might be the perfect time to start exploring the short-term and long-term advantages of working with a professional bookkeeper.

We Do Books™ can take time-consuming tasks off of your plate. It’s very easy for most small business owners to fall into the trap of trying to do everything themselves in an attempt to keep costs down.

We know that most business owners dread bookkeeping and would prefer to focus on the aspect of their business in which they are most passionate about and most profitable. That profit center is not the bookkeeping. It’s important to maintain the vision that inspired them to start their own business, to begin with, and bookkeeping can definitely distract from this.

Is it better to hire a Bookkeeper or an Accountant?

Ideally, you would like to hire a firm or professional with both bookkeeping and accounting capabilities.

What’s the difference exactly?

An accountant can help you see the big picture of your financial situation and ensure you remain in compliance with IRS regulations by filing your required documents and payments on time. Additionally, a skilled accountant will support you beyond just tax season. For example, a CPA can inform you of newly enacted or upcoming tax laws (both state and federal) that may impact your business. A CPA can also offer strategic advice on your business and financial plans. For instance, is securing a line of credit against your receivables a smart move before launching a new product? That’s why all We Do Books™ clients receive unlimited consultations with a Certified Public Accountant!

On the other hand, a good bookkeeper handles the day-to-day accounting tasks, including paying bills, tracking expenses, and ensuring they are entered correctly, providing payroll services, and more. While bookkeeping may seem boring and tedious, it’s the accumulation of these details that paints the bigger picture, allowing business owners (with the accountant’s help) to make informed business decisions. We’ve found that many people who have worked with some aspect of QuickBooks now consider themselves bookkeepers, but this is not accurate.

Remember… Accounting = Knowledge
and Knowledge = Power.
Power to better run your business.

MICHAEL DISABATINO, FOUNDER

Many businesses view bookkeeping as a necessary evil — something that only needs to be done in order to meet IRS requirements. However, the need for up-to-date and accurate bookkeeping extends far beyond tax filing purposes.

Before being issued any line of credit from a financial institution, you can expect them to request up-to-date accounting records. The same applies to any merger, sale, or acquisition.

The real value of accurate, up-to-date bookkeeping lies in the ability to make informed business decisions based on reliable data presented in your financial reports. When all your business transactions are neatly organized within your chart of accounts, you’re in a much better position to make clear, educated decisions. The reports your accountant provides will offer a quick snapshot of where your business is generating profit — and where you may be overspending.

When making the decision to use a professional bookkeeping service or to bring in a Bookkeeping Consultant, it is recommended that you consider:

Their past experience
Their qualifications
If the firm or person is experienced with any possible bookkeeping software you have already been using

There are actually a couple of ways in which you can choose to hire a professional bookkeeper:

You can choose to outsource the entire process and allow professionals to handle all of your data entry and filing. This frees up your time and resources so you can focus on the areas of your business where you excel. In many cases, your accountant will prefer that your records are maintained by a professional, as it increases their confidence that everything has been properly recorded.

The other option is to bring in your accountant or bookkeeping consultant to ensure your bookkeeping systems are properly set up. Once the chart of accounts and overall system are established, the consultant can train an employee on proper data entry procedures.

Whatever option you choose, the key is to accurately assess the financial health of your business. While bookkeeping may seem like a small added cost, it’s an investment that can ultimately give you more time to grow your business—and increase your bottom line.