Accounting is one aspect that is common to all businesses. Whatever enterprise you are running, you must regularly be aware of your financial situation and meet your financial obligations to local, state, and federal tax authorities. One great way to achieve this is to hire CPA and bookkeeping services. You may wonder how these services will benefit your business and whether you need to hire both. Let’s discuss their roles and the advantages of having both.
Bookkeepers handle the record of a company’s daily transactions. They are responsible for building a ledger, often using accounting software, such as Quickbooks, for recording financial information. Depending on the agreement with the client, a bookkeeper’s services may include the following:
- Recording financial transactions involving business expenses and revenue
- Performing bank and credit card account reconciliations
- General ledger review and adjustment
- Payroll data reconciliation and management
- Tax report filing and payment
The accounting data gathered and organized by a bookkeeper are often accessed by CPAs to provide guidance on more complex matters in line with the Generally Accepted Accounting Principles.
Certified Public Accountants (CPAs) are licensed accountants who are required by law to keep themselves abreast of tax laws and updates. Their primary role is interpreting, analyzing, and communicating data to the right people.
Being tax experts, CPAs can help businesses plan their tax strategy to decrease their tax liabilities within the confines of the law. They can assist you in developing a financial system that ensures your company operates at maximum financial efficiency.
CPAs are trained to provide formal or informal auditing services. Like a tax lawyer, they may represent your company during an IRS audit. CPAs can also perform bookkeeping duties should they wish.
In gist, bookkeepers are responsible for gathering, recording, and organizing data, while CPAs summarize and analyze the data and then present them to business owners and decision-makers.
What are the advantages of hiring a separate CPA and bookkeeping service?
CPAs are highly trained in the field of accounting and tax laws. While CPAs can perform bookkeeping tasks, hiring a separate service for both is better. Here are some of the advantages of doing so:
1. Cost Effective
CPA services are more expensive than bookkeeping services. Hiring a CPA firm to handle bookkeeping duties for your business is also more costly. It is more cost-effective to hire a bookkeeping service to maintain your books.
2. Prevent Error
Finding mistakes in your own work may be more complicated than having someone else check them. The same is true when working with a CPA firm and a bookkeeper; i.e. hiring a CPA firm that is not connected with your bookkeeping service helps to more easily identify of errors.
3. Minimize Opportunities of Conflict of Interest and Fraud
It is best to have different bookkeeping and CPA services so one can audit the other and minimize the possibility for conflict of interest or fraudulent activities.
4. More Efficient Use of Expertise
Each service has its expertise. Bookkeepers are trained to record and organize financial records more efficiently. They are also often well-versed in their accounting software (such as Xero or Quickbooks), while CPAs are tax experts and are great at analyzing and giving sound business advice based on financial data. Tapping them for what they’re good at is a more efficient use of their expertise which, in the long run, saves your business time and money.
Keeping your accounting records updated, complying with your tax obligations, and understanding your financial status are instrumental in the success of your business. Bookkeepers and CPAs can aid your business in these tasks through their respective fields of expertise. Partnering with an experienced bookkeeping service and a reputable CPA firm will benefit your business by freeing up your schedule to focus on your team and your company’s growth.
CRI Payroll Services is ready to assist you and your company if you are looking for an expert in bookkeeping. We offer comprehensive bookkeeping services for start-ups, small and medium-sized businesses, including coding transactions, account reconciliation, financial statements, and more. Whether you need a quick bookkeeping refresher, ongoing consulting, or weekly support, we can help you maintain accurate financial records to ensure your business runs smoothly and efficiently.
Contact CRI Payroll Services to learn more.