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.
- View the slideshow
- Xero accounting software
- Bill.com – Online bill pay
- Hubdoc – Financial docs data capture
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.
Upcoming events
- Terra Jo will be hosting another episode of Holistic Business Finance, RSVP on her show page.
- TJ will be an expert at the next Business Mastery Salon on Taxes March 6
- TJ will be co-hosting Achieving Financial Success as a Self-employed Womxn put on by The Pledgettes: A community for womxn to talk about money.
