Do I Need a Bookkeeper or an Accountant?
By Tania Potter ·
Short answer: you need both kinds of work, but not always two different people. A bookkeeper keeps your books current every month. An accountant or tax preparer turns those books into tax returns, tax planning and advice. You can get both from one person or firm, as long as both jobs actually get done.
Here is how to tell what you need right now.
What does a bookkeeper do?
A bookkeeper keeps the record of your business accurate and current. That usually means:
- Recording every transaction and putting it in the right category
- Reconciling the books to your bank and card statements every month
- Tracking what customers owe you and what you owe others
- Sending or recording invoices and bills
- Producing monthly reports, like a profit and loss statement and a balance sheet
Good bookkeeping is steady and unglamorous. It is also what every other financial decision stands on, from what to charge to when you can hire. If the books are wrong, everything built on them is wrong too.
What does an accountant do?
An accountant works with the finished books. Depending on who you hire, that can include:
- Preparing your business and personal tax returns
- Planning for taxes during the year, including estimated payments
- Advising on how your business is set up and taxed, such as whether an S corporation election makes sense
- Reviewing your numbers and helping you plan hiring, pricing and spending
- Preparing statements for a lender or an investor
Titles matter here. A CPA is licensed by a state board. A tax preparer with a PTIN is registered with the IRS to prepare returns for pay. Ask anyone you hire what they are qualified to do for you.
How do I know I need a bookkeeper now?
Look for these signs:
- You are weeks or months behind on categorizing transactions.
- You are not sure who owes you money right now.
- Tax time means a box of receipts and a long weekend.
- Your books do not match your bank balance, and you do not know why.
- You have no insight into your numbers or what to do next.
Any one of these says the monthly work is not getting done. That is bookkeeping, and it is the place to start.
How do I know I need an accountant now?
Look for these:
- You are deciding how to set up or tax your business.
- You are asking whether an S corporation election would help.
- You sell in more than one state and are unsure about sales tax.
- You owe estimated taxes and do not know how much to set aside.
- You are applying for a loan or talking to investors.
These are judgment calls with tax and legal consequences. They need someone qualified to advise you, working from accurate books.
How often should the books be done?
Every month, at minimum. A monthly rhythm lets you catch a missed payment, a double charge or a customer who has not paid while it is still easy to fix. If you have a lot of transactions, weekly can make sense.
Once a year, at tax time, is the hardest way to do it. Memories have faded, receipts are missing, and the tax return waits on the cleanup.
Can I do my own bookkeeping?
You can, and some owners do it well. It takes steady time every month, a working sense of how to categorize what you spend, and the discipline to reconcile even when the month is busy. If it keeps slipping, that is your answer. Your time is usually worth more on the work only you can do.
Do I need a bookkeeper if I have QuickBooks?
Software records transactions. It does not decide whether a charge is a business expense, notice that a payment was recorded twice, or explain why the books and the bank disagree. Someone still has to review, categorize and reconcile every month. If that someone is you, ask whether it is the best use of your time.
How do I choose?
Whoever you hire, ask:
- What is included every month, and what costs extra?
- When will my books be closed each month?
- Who prepares my tax return, and are they qualified to?
- Who do I call with a question, and how fast will I hear back?
- How will I see my reports, and will someone walk me through them?
Clear answers to those tell you more than any title on a business card.
What does it look like when both jobs are covered?
Your books are closed every month. You get a short set of reports that show what came in, what went out and what is left. Taxes are planned during the year instead of discovered in the spring. And when you need to make a decision, like hiring or spending on marketing, you have numbers you trust.
That is how we work with owners at Virtual OPS: books, payroll, tax preparation and planning, and advice, handled by one team. I am a registered tax preparer (PTIN) and QuickBooks Certified, and I have run operations for businesses for 20+ years. You can see our bookkeeping and advisory services.
The short answer
You need a bookkeeper's work every month and an accountant's work for taxes, planning and big decisions. Start wherever you are furthest behind, and make sure both get covered.
Book a free 30-minute finance review and we will look at where your books stand today.
Questions owners ask
Do I need a bookkeeper if I have QuickBooks?
The software records your transactions, but someone still has to review them, categorize them and match the books to the bank every month. That is bookkeeping.
Can one person do both bookkeeping and tax?
Yes. Plenty of owners use one person or firm for both, as long as the books are kept current and the returns and planning are handled by someone qualified to prepare them.
What is the difference between a CPA and a tax preparer?
A CPA is licensed by a state board. A tax preparer with a PTIN is registered with the IRS to prepare returns for pay. Ask anyone you hire what they are qualified to do for you.
Book a free 30-minute call about a fractional CFO
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