As we uncovered in a recent webinar a staggering 33% of small business owners utilize the services of a bookkeeper. The number alone is suprising however in business what financial guidance should your business seek? When do you need a bookkeeper vs an accountant or CPA? We take a look at just that.
1. What Bookkeepers Do?
A bookkeeper is someone who is often employed within the organization or this role can be outsourced of course. Typically that person is responsible for accurately entering transactions, including accounts receivable, accounts payable and inventory etc.
2. What Accountants Do?
Accountants can (but usually do not) perform bookkeeping functions. They typically prepare detailed financial statements, perform audits of the books for public companies. They may prepare reports for tax purposes however they are classified by the IRS as an “unenrolled preparer”. Which means they have no standing with the IRS in the matter of signing tax returns or representing clients during an audit by the IRS. Only CPAs, tax attorneys, and Enrolled Agents can represent a taxpayer before the IRS
3. What Does A Certified Public Accountant or CPA Do?
A CPA has an additional level of credibility and expertise. A CPA is an accountant who has passed certain examinations and met all other legal and statutory obligations within your State. In addition to preparing and reviewing financial statements, CPA’s also prepare tax returns for businesses and individuals, sign tax returns and represent tax payers before the IRS for audits and other matters. In the State of Michigan for example your CPA has to complete 40 hours of CPE or continuing education each year.
4. What Type Of Financial Guidance Is Best For Your Business?
Every small business has its own unique challenges together with direction. Begin the conversation with key stakeholders in the organization to determine the current guidance. If you seek more information than you currently have then explore the discussion. You may determine that your current relationship is sufficient for the business, however if you agree your financial direction is lacking than the expertise of a Certified Public Accountant could drive more value to your business.
To help you understand in greater depth what you should be looking for in those relationships we prepared a webinar discussing this matter with Jonathan Satterfield CPA. To learn more please access our recorded session here- https://bit.ly/2KTepMx
Do you need help preparing your technology for the future? Our vCIO team is ready to tackle your challenges. Contact us today to find out what a vCIO can do for your business.