bookkeeper vs tax preparer

If you haven’t always been diligent about your financial record-keeping, most bookkeeping services will go through your old receipts, invoices and bank statements to bring your books up to date. This service usually carries an additional fee, so it’s important to price out your catch-up bookkeeping costs while searching for a bookkeeping service. A bookkeeper’s role is primarily transactional, dealing with the day-to-day recording of financial transactions, including purchases, sales, receipts, and payments.

Accountant vs Bookkeeper FAQs

This guarantees accurate financial accounts, compliance tax filings, and well-organised records. An outsourced part-time bookkeeper can be really helpful for your business. You can take care of some simple things on your own, such as billing clients and collecting receipts.

800Accountant: Best for tax support

  • You’ll also want to take steps to protect yourself if you begin to suspect that the tax prepare you’ve chosen is disreputable.
  • You may also be an ideal bookkeeping candidate if you want a good job with a respectable wage and decent security but may not be looking for a long-term career.
  • Work with a bookkeeper from the start to record your financial transactions on an ongoing basis.
  • In addition, you can reduce the risk of errors by having financial professionals with different areas of expertise review your books.
  • Tax preparers are required to have a minimum of a high school diploma or equivalent.

Feel free to manage some basic tasks yourself like collecting receipts and invoicing customers. Accounting is the process of recording, summarizing, and reporting a company’s financial transactions. It provides visibility into your business’s cash flow in the early stages. Starting a business is exhilarating but also overwhelming, especially when it comes to managing your finances. As a first-time founder, you have a lot on your plate – building a product, getting early traction, fundraising – and hiring accounting services often fall to the bottom of the priority list. Having a good bookkeeper look at your financial statements will start a conversation on how to grow your business.


bookkeeper vs tax preparer

CPAs are federally approved to represent you in all matters before the IRS. Those that specialize in tax preparation can also typically help you with tax and financial planning, accounting needs, and most other financial tasks that you might have. Look to a CPA to identify the credits and deductions you qualify for to increase your tax refund and help tax preparer vs cpa lower your tax bill. EAs are best for help with IRS issues and tax preparation and planning advice for an individual or business. CPAs are best for broader accounting needs and identifying credits and deductions to increase your tax refund or lower your tax bill. The differences between tax preparers and bookkeepers can be seen in a few details.

If you don’t have bookkeeping in place, your business will be running blind. You won’t have the numbers you need to make strategic decisions throughout the year. All features, services, support, prices, offers, terms and conditions are subject to change without notice. When you’re looking to hire a tax professional, you want someone knowledgeable — someone you can trust to get the job done and keep your personal information secure. Bookkeepers are employees who are in charge of the company’s general ledger. They are well-versed in basic accounting principles, and they apply these in their work.


Or, if it isn’t already included, you may be looking for tax support to take some of the pressure off when it’s time to file returns. These services can help you claim the correct small-business tax credits and deductions, prepare your returns and file them. Even if a bookkeeping service has all of these add-ons, they can be expensive, so be sure you understand the total cost before choosing a service.

bookkeeper vs tax preparer

What does an accountant do?

CPAs, for instance, must pass a state licensing exam, whereas enrolled agents are licensed at the federal level. At the very least, you can expect most bookkeeping services to input transactions, reconcile accounts and send you financial statements regularly. Most services touch base monthly, but in some cases, you can pay extra to receive weekly reports. Depending on the company, you can speak with your bookkeeper (or team of bookkeepers) as often as you’d like or at least a few times per month. However, if the client’s understanding is that the accountant will then prepare the financial statements based on those inputs, then Section 70 of SSARS No. 21 would apply. What kind of bookkeeper or tax preparer you require will depend on your particular demands as a business.

How Can a Bookkeeper Become an Accountant?

However, many bookkeepers choose to become certified by organizations such as the American Institute of Professional Bookkeepers (AIPB). Tax preparers, on the other hand, are required to obtain a Preparer Tax Identification Number (PTIN) from the IRS. They may also be required to obtain additional certifications, such as an Enrolled Agent (EA) or Certified Public Accountant (CPA) license. Customize plans to include other services like accounts receivable processing, inventory reconciliation and payroll support.

Designed for startups that have high growth potential and use accrual basis accounting. Business owners have to use Bench’s proprietary software, which could make it hard to move to another provider in the future. Someone on our team will connect you with a financial professional in our network holding the correct designation and expertise. Our writing and editorial staff are a team of experts holding advanced financial designations and have written for most major financial media publications. Our work has been directly cited by organizations including Entrepreneur, Business Insider, Investopedia, Forbes, CNBC, and many others. For information pertaining to the registration status of 11 Financial, please contact the state securities regulators for those states in which 11 Financial maintains a registration filing.

  • Another important consideration is whether the professional you choose is a good fit for your business.
  • Most small businesses and many individuals have a tax accountant to help them file quarterly estimated taxes and annual tax returns.
  • In general, CPAs, enrolled agents, and other tax preparers manage your taxes.
  • They may also be required to obtain additional certifications, such as an Enrolled Agent (EA) or Certified Public Accountant (CPA) license.
  • Discover how our bookkeeping services can help your business, especially when combined in powerful synergy with the services of a certified public accountant (CPA), enrolled agent (EA), or other tax preparer.
  • Now, I require my clients to do tax preparation and reduction in one monthly maintenance agreement, and the clients who are using this package are soaring – and that really fills my cup professionally.

bookkeeper vs tax preparer

Neither we nor our suppliers shall be liable for any damages of any kind with the use of this website. Many people don’t know the difference between an accountant and a bookkeeper. If you’d like to hire an expert bookkeeper, look for candidates with certifications from either the National Association of Certified Public Bookkeepers or the American Institute of Professional Bookkeepers. However, these certifications are optional; people don’t need one to be a professional bookkeeper. Marianne Hayes is a freelance writer who’s been covering personalfinance for nearly a decade. She specializes in small-business news,budgeting, saving and wealth management.