How much does it cost to hire a bookkeeper? Or what about an accountant? And what about a tax preparer?
The answer depends on what your needs are and the size of your business.
Every business needs an accountant to ensure they are compliant with their taxes. Business taxes can be intricate and have many more rules than personal taxes.
But what is the difference between an accountant, bookkeeper, and tax preparer? And why do you need one? I’m going to give you all the answers.
What’s the difference between accounting services?
A bookkeeper records the financial transactions of a business. While there’s no formal education required to be a bookkeeper, most do have some training.
An accountant has a more formal education. A Certified Public Accountant (CPA) is required to have a higher education degree. Most have a master's degree in accounting. An accountant provides financial analysis based on bookkeeping. They may not be as involved in business operations, but they are essential to supplement a bookkeeper's work and provide valuable information to help your business.
All CPAs are accountants and can do bookkeeping. Accountants can also do bookkeeping. But not all bookkeepers are accountants or CPAs.
Tax Preparers are one of the most confusing job titles because almost anyone can become a tax preparer. But not all tax preparers are created equal. While CPAs are required to have some formal education about taxes, some decide not to specialize in taxes; instead, they specialize in other areas of accounting, such as bookkeeping or auditing.
The IRS has programs for tax preparers, so the job is done accurately. Some of those programs include:
Seasonal Tax Preparation
Enrolled Agent (EA program)
There are also Advisory Services. They take on many forms of coaching, mentoring, or tax planning. Some have even niched down (like Curtis Accounting Solutions) to specific industries (like quilt shops)
How do I find the right accounting service?
Finding the right professional to support you can be challenging at times. And if you don’t hire the right financial support, it's one of those things that could affect you for years and years. Here’s how I recommend finding someone that will fit your needs:
Start with a basic internet search. If you want a quilt shop, search for “quilt shop tax preparation.” (You could even ask your competitors who they are working with).
Look at their online presence. Are they using blogs and social media to educate their community about their profession? Someone focused on educating their clients is more likely to want to continue educating and guiding you every step of the way.
Once you have a list of potential professionals, read their online reviews.
Contact them when you have a few you like and ask for their current client referrals or references.
Contact their references. Ask about their experience with that tax professional. Trust, but verify.
When you start, you are the Chief Everything Officer, and resources are tight. I recommend you hire a bookkeeper to keep your financial records straight. This will be important when you prepare your taxes. It also makes your tax preparation cheaper.
When resources become available, I recommend hiring an accountant specializing in your industry because they will already be familiar with your business model, vendors, and expenses. They’ll be able to interpret the story our finances tell us and provide invaluable information to grow and profitably scale your business.
Hiring contractors or firms give you the benefits of their experience and expertise but at a fraction of the cost. Hiring an accounting firm like Curtis Accounting Solutions also gives you an advantage. It gives you access to their experience and knowledge that you most likely couldn’t afford if you hired them as an employee.
How much should I pay?
Within the financial industry, you can find all price ranges. You could pay minimum wage to hundreds of thousands of dollars a year. The bottom line: you get what you pay for.
Take the time to research and interview the person you are considering hiring. It will go a long way to have the conversation to see if it’s a good fit for you.