Bookkeeper vs. CPA

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.

Best Practices for Invoicing

sending invoice

You can hire us to set-up and manage this process of invoicing and receivables. This will keep you from having to chase down payments and allow you to focus on what you do best – servicing your customer.

If you use a robust software system like QuickBooks Online, invoicing can be integrated and streamlined as a simple system within your business.

In our experience, there are some simple processes that make cash flow management easiest:

  1. Enter the complete contact info for your prospect immediately into your software, including full name, company name, email address and phone number.
  2. Send an estimate within an hour of your meeting or discussion for your proposed services.
  3. Convert the estimate to an invoice once accepted and send immediately with a professional, kind note.
  4. When possible, require payment for services before you begin project. If not possible due to your industry, request half-down and the rest upon completion.
  5. Accept all forms of payment.
  6. Review your receivables list weekly for cash-flow projections.
  7. Use the system messaging/notification function to remind clients of over-due payments.
  8. Use alternate professional methods to reach out as reminders, such as sending an email sharing valuable resources or making a quick phone call to check in and catch up professionally.

Invoicing and collecting receivables should be an integral and fluid system for your business. Let us help you remove the headache and angst of invoicing and collections, which will allow you to maintain a professional posture and long-term relationship with your clients. 

Bookkeeping Basics For Business Owners

bookkeeping basics

You hire us to manage your books, invoices, receivables, payables, and store necessary paperwork.

But as a business owner, it’s best to have a big picture overview of what is most important for tracking your spending and income. 

Here is what is important to know:

  • Pick a software system like QuickBooks Online that you and your team can access online and commit to it.
  • Link all of your business accounts, including credit cards to the software
  • Based on the structure of your business, choose appropriate categories to allocate all expenses and automate these designations
  • Keep your business and personal expenses separate
  • Look at your dashboard weekly and monthly to get a big picture overview of your financials
  • If you have employees or are set-up as an S-Corp, run payroll and taxes monthly
  • Set a quarterly review with your board, bookkeeper, accountant or CPA to make sure you are on track with taxes for the year.

The success of your business is dependent upon understanding and managing your finances.  Bookkeeping will help you analyze and make informed decisions about the direction and growth of your  business. We will help you make sense of your finances so that you can focus your time in developing your craft.

Subcontractor Compliance Paperwork

If your business hires individuals or small companies, you are most likely required to issue 1099s to these individuals or entities.

Collect W9s

You should have a W-9 on file for each of these entities. If you have not collected W9s, now is the time!  

Any individual or any unincorporated business that you pay $600 or more in a year will need to have a 1099 issued BY YOUR BUSINESS. If you hire a cleaner to clean your office, this is a subcontractor. If you hire a helper to assist with a project or event, this is a subcontractor. If you hire someone to mow your lawn, this is a subcontractor.

Issue 1099s

You are obligated to find out if this subcontractor is incorporated or not. If the subcontractor is not incorporated, you must report the total that you paid the subcontractor to the IRS by issuing 1099s.  So how does this work?

When you hire an individual or company, you should collect a W9 before issuing a payment. The W9 is a form that the subcontractor completes with his/her legal name, mailing address, and tax ID number. The W9 will also let you know if the business is incorporated. These incorporated businesses do not need 1099s issued, they are the exception. You need to have this information in order to complete the 1099s.  

I know, I know….you have hired subcontractors and you now realize that you have not collected these forms. I’m not suggesting that this is ok, but let’s be real. Many of you simply have not followed the “proper” procedure. I get it.  

But if you haven’t collected W9s by now, you need to get busy! The deadline for issuing 1099s is January 31 of each year. It will be here again before you know it.  You can find the W9 here.

For detailed information about subcontractors and IRS regulations, go to the IRS website here.

Hire Us To Help

Don’t have time to call all of these entities and collect the completed forms? Call us at ! We will take care of it for you!