Your Financial Dream Team: CPAs, Accountants, & Bookkeepers

In this episode of Holistic Business Finance Terra outlines the differences between bookkeepers, accountants, and CPAs. Check out the video and see the highlights below.

Bookkeepers

  • Keeps the books for a company
  • Recording transactions
  • Track expenses/deductions correctly for easy tax prep
  • Manage & pay bills
  • Manage cash flow & credit cards
  • Keeps records & files organized
  • Handle the data entry

Having a good Bookkeeper is having a good detail person

Accountants

  • A level-up from bookkeepers
  • Can perform bookkeeping functions
  • Perform audits
  • Prepare reports for tax purposes
  • Prepare reports for management purposes
  • “Unenrolled preparer” – no automatic standing with IRS

CPA

  • Certified Public Accountant
  • Passed CPA exam
  • Meets statutory & licensing requirements of a state
  • Prepares & reviews financial statements
  • Prepares tax returns for businesses & individuals
  • Signs tax returns & represent you to IRS
  • Prepare reports for tax purposes

The Dream Team

SOMEONE TO KEEP THE BOOKS — Automation is your friend
SOMEONE TO MAKE SENSE OF YOUR NUMBERS — This is how you grow
SOMEONE TO PREP & FILE YOUR TAXES — Cause you don’t want to skip this step!

Questions & Answers

  • Do you need a CPA? It depends on your needs. If your needs aren’t complicated.
  • What can I do to eliminate receipts? Try tools like Xero or Hubdoc
  • What should I ask an accountant I want to hire? Ask them about their experience. Get industry specific.
  • Pay your cell phone and internet bill with your business account then account 50% (or whatever) as a draw into your personal account.
  • Tell us about pricing? Bookkeepers often charge an hourly rate, Accountants bill monthly, and CPAs charge by the “project”. Try to find someone who bills a predictable monthly fee.
  • Tips for getting started doing things right?
    • Rule #1, get a business checking account and a savings account (not necessarily a business savings) have a place for savinging tax money.
    • Get a system (like Xero or Quickbooks) setup just for your business.

Top Donor

Big thanks to Andrea Mauro of @pixellustre and www.pixellustre.com for their donation to this week’s episode.

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