Bookkeeper or Accountant?

[D_Victoria_Virtual_Assistance]

Well, I have been doing A/P and A/R for businesses as an employee pretty steadily for over 5 years now, however, I am not 100% confident in this skill. Therefore, I am going to be gathering information and contacting different sources regarding how to set up my accounting and what exactly are my tax responsibilities (self employment tax, just how much to put aside..etc.)

I am not sure though if I need an accountant or a bookkeeper?

[Rebecka Melson]

I would recommend both. I would use a bookkeeper to assist you with the set-up and routine bookkeeping and "maybe" use a CPA to do your taxes. Most CPA's either hire or sub-out the routine stuff to a bookkeeper anyway and if anything review the tax return before it is sent out. So, I wouldn't pay the CPA rate of $85-$250/hour for something he is going to sub-out to someone else anyway. I would pay the bookkeeper directly at $25-60/hour instead.

A good bookkeeper will tell you if there is a complex issue you need to discuss with a CPA.

[Rebecka Melson]

Also, you need to differentiate what you mean by an "accountant". An accountant isn't always a CPA (Certified Public Accountant), there are ABA's which are Accredited Business Accountants and bookkeepers often call themselves accountants (which is legal as long as they don't claim to be a certified or accredited accountant).

I always tell people I am a bookkeeper because most people assume that if you say "accountant" that you are a CPA.

The only real difference between an ABA and a CPA is that only CPA's are allowed to conduct audits or appear before the IRS on your behalf.

[BinAL]

Some financial services offer both tax and bookkeeping services, and CPA is not necessary. Here is an excerpt from the website for the company I use (not sure if it's okay to link to or name so won't)

<Owner> is a member of the following organizations in addition to being a Quickbooks Certified Pro-Advisor.

* National Society of Accountants
* National Society of Tax Professionals
* American Institute of Professional Bookkeepers
* California Society of Accounting and Tax Professionals.

X Financial Services Company offers services to all types of businesses.

X Financial Services CO can offer the same services (as a CPA) for a much lower hourly or monthly rate. We are interested in keeping a long term relationship with you. To do this, we are willing to lower our fees beyond the typical CPA's rates.

[D_Victoria_Virtual_Assistance]

Thank you both for your input it really is appreciated!

Rebecka, your suggestions are exactly along the lines of what I was thinking...bookkeeper for setup and the month to month items and accountant (CPA) for taxes.

One of my goals this week is to research and contact such individuals, so thank you again!

[kathiemt]

You need an accountant to ensure you are operating as required according to tax legislations in your region - you're going to need him or her at tax time anyway, aren't you? Unless things operate differently in your country to mine.

Bookkeeper if you have no experience in keeping books. I do my own bookkeeping but always look to my accountant for guidance if I'm not sure about something.

[Tess]

We have just contracted with an accounting firm that also does books (but I handle that part pretty well on this end, even if I do have really old school methods ) so we'll just be using him to make sure we're getting the most out of our tax payments as well as filing the right forms each quarter/year.

As a business owner I really like to know what's going on - especially when there are payments in the thousands going out to the IRS every three months, so it was really important to find an accountant who was willing to talk us through each item and provide some insight into the what's and why's of it all. It took a bit to find the right person but we did and we're so glad we took the time to make sure we're working with someone who understands our 'style' - just something to consider when you're calling around. If you're at all hands-on like I am, be sure to ask a few questions to get a sense of how forthcoming the person is with methods and insight. It will make a huge difference in how empowered you feel as a business owner.