What is the difference between a bookkeeper and a CPA?  What does a bookkeeper do? What does a CPA do? Does my business need both?  Are you confused about these roles? You’re not the only one! Let me help you clarify.

First off, you need both.  Your bookkeeper is the pitcher.  The player with her hands on every play.  The CPA is the coach, guiding you based on the information provided by the pitcher.  It is best for you and your business if you find a bookkeeper and CPA who are able to work together to be sure everything is covered!

A bookkeeper records the numbers: actual financial activity happening within your business. A bookkeeper is responsible for your day to day business transactions: 

  1. Tracking your business expenses and income
  2. Reconciling your bank accounts, credit card accounts and loans
  3. Tracking your payables/bills
  4. Tracking your receivables and sending out regular statements to your customers
  5. Prepare regular business reporting to business owner(s)

These are the basics.  The above tasks should be completed on a regular basis (weekly or monthly depending on your business nature and volume).

Some business may need additional services. We will call these the “fuzzy” tasks.  This is where most businesses experience confusion because these services can be completed by the bookkeeper OR the CPA.  As a business owner, it is important that you identify who will be completing these tasks on your behalf. The CPA may assume the bookkeeper is completing these tasks.  Conversely, the bookkeeper may assume that the CPA is completing these tasks. Ultimately, you are responsible.  

Manage payroll including

  • Running regular payroll to pay business owner and/or employees
  • Complete required payroll deposits as dictated by IRS, State, and local jurisdictions.
  • Complete required Quarterly reports including 941, State Quarterly, Quarterly UI Reports, and any local reporting
  • Enter payroll into the bookkeeping system
  • This may also include tracking benefits if applicable

File sales tax reports and arrange for payment: Quarterly or Monthly as dictated by jurisdiction

File periodic report (annually in Colorado)

While a bookkeeper is responsible for recording the actual numbers, the CPA makes decisions about these numbers based on tax law.  The CPA should advise you about estimated quarterly taxes. The CPA will create your tax return and file your income taxes.  Some CPAs will help with the “fuzzy” tasks, some will not. Your CPA should be licensed and certified. Your CPA will provide additional, in depth analysis of your business.

Your business will operate most effectively if all the players and coaches have open communication. When the bookkeeper and the CPA can work together and are in touch with one another, you and your business will reap the rewards.

About the Author Anna Faulk

I am the owner of Incline Business Essentials, a full service bookkeeping and virtual administrative business.

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