So when should you hire a local CPA, bookkeeper or an accountant?
Most of the time, our clients don't know the differences between them so we go on to explain.
A bookkeeper is someone who “balances the books” and records your business’s transactions on a regular basis. They put these transactions into the right categories and record accounts payable (who you paid and how much) and accounts receivable (when you get paid, by which company or client and how much). They also keep track of your receipts and create reports such as an income statement, cash flow statement and a balance sheet.
Accountants take the transactions that bookkeepers handle to analyze the data and create detailed reports. They help file tax returns and make sure your taxes are paid in a timely manner. Accountants can also look at your transactions and reports to make recommendations on what financial steps to take for your business.
If you’re looking to hire an accountant to handle your small business accounting, you might consider working with a CPA instead. It turns out that about half of all accountants are also CPAs. While there are about 1.3 million accountants in the U.S., there are only 650,000 CPAs. A CPA has met more rigorous demands and requirements to obtain and maintain their license. Besides performing all the tasks that accountants do, a CPA can come up with financial strategy and planning for your business. Think of this as a Chief Financial Officer (CFO) for you business. However, we don't come with an attached CFO salary.
We typically recommend writing down all the tasks the business owner "enjoys". We take them through a list of tasks that are considered a "time suck" which is when the owner is not working on items that is bringing the business income. Most of the time, the daily business operations is the "time suck". That's when we recommend hiring a professional for those services or tasks. This can range from hiring an administrative employee, a bookkeeper a few days a week or meeting with your CPA once a quarter to find out where you are financially.
We really hope this helps anybody looking into these services. All of these are services we offer at Tax & Wealth Management located right here in Corvallis, Oregon. If you would like more information please call us at 541-753-4185 or email firstname.lastname@example.org and schedule a consultation.