The reminder to do your accounting comes up every month. You hit “delete”. You just can’t face that growing pile of billings and expense receipts right now! All too soon it’s April and you’ve done no bookkeeping at all. This time, as you lock yourself in your office to finally tackle the job you swear you’re going to hire a bookkeeper and get this task off your plate for good.
But where do you start? How do you find someone you can trust? How much will it cost? How do you know if the numbers are right?
News flash! Not all accountants do taxes! They can do bookkeeping, prepare financial statements, perform audits, create budgets and determine product costs/pricing as well as taxes. Ask for their areas of expertise. Who you hire depends on the tasks you want done. Here’s a guide to four choices in getting that accounting task off your plate.
A Bookkeeper is your data entry specialist. The bookkeeper generally performs basic tasks like paying bills, creating customer invoices, and reconciling bank statements. They may or may not have an accounting degree, and typically their fees are on the low end of the scale.
An Accountant generally has a 4-year college degree and can do all the same things as a bookkeeper – with a twist. Accountants add analysis to the mix, like budgeting, explaining differences in results this year vs. last year and other tasks that help you make more informed decisions. An accountant will cost more money, but you’ll be able to get answers to questions like ‘where did my money go?’.
A CPA (Certified Public Accountant) has a college degree in Accounting, takes an exam and must meet state requirements to maintain a license. A CPA can do all the things a bookkeeper or accountant can do, but also can perform audits or limited reviews to provide assurance there are no material misstatements or omissions in your financial reports. CPAs are at the high end of the scale in terms of cost. CPAs can also have areas of specialty and can prepare your taxes.
The fourth choice in bookkeeping is the Enrolled Agent or EA. EAs take a test in order to get registered with the IRS. They specialize in taxes and can represent you with the IRS. Their fee range will depend on what you need them to do. Marcy Maslov was co-contributor to this press release.