If your business is very small, you may not need any of these services as the bookkeeping may be simple enough for you to handle on your own. However, that can change if your books start to get more complex, your business starts to grow beyond that, or you realize you would have more time or save money by actually hiring a virtual bookkeeper. The remote bookkeeper will do daily transaction recording; expenses, provide financial statements; and payroll management (if they provide this service) in software like QuickBooks; and ensure financial records are accurate and up to date. These financial records are ready for you to do your taxes or to hand off to a CPA to do your taxes.
For some years, the terms bookkeeper and accountant have been used interchangeably. As you continue to read this, you will see part of it is since each bookkeeper’s or accountant’s level of knowledge can overlap. Some bookkeepers are capable of doing various duties an accountant can do in addition to regular bookkeeping. This is dependent on their level of education. It helps to see which services a bookkeeper offers to understand their academic qualifications and to know who would be a good fit for your business. If you were to research this, you would have a better understanding of each of these roles. Accountants are not bookkeepers, although sometimes they use this job description since they can do bookkeeping in addition to other accounting tasks. Accountants are usually needed when a company has become too large for regular bookkeeping services, is a commercial company, or incorporated. They generally charge more than bookkeepers even for minimal bookkeeping services because of their title. There are different levels of accountants based on their degree of education, and not all accountants are CPA’s.
Hire a CPA (Certified Public Accountant) for tasks requiring advanced expertise, such as complex tax situations, budgeting, strategic financial planning, audits, or when you need a licensed professional to represent you before the IRS. CPA’s are overqualified to do minimal bookkeeping tasks, and bookkeepers and regular accountants are underqualified to do the more intricate roles that a CPA has the expertise and licensing to do.
Many businesses use both a bookkeeper and a CPA. A bookkeeper handles the day-to-day financial management, providing a strong foundation of accurate records, while a CPA provides the specialized expertise for taxes, strategic planning, and high-level financial analysis as your business grows.
