We like to recommend that you separate your bookkeeping from your taxes. Our firm does not do taxes for several reasons. First, I don't really enjoy them and they never really interested me. I was always much more interested in small business owners and entrepreneurs, so we focus on helping them. Our bookkeeping services are designed to help small business owners from a financial perspective. We design customized bookkeeping systems tailored to the needs of each client and then show the business how to use their bookkeeping system as a tool to help them make business decisions. We recommend that a business separates their bookkeeping from their taxes and here is why.
A Better Bookkeeping System
A service that only does bookkeeping is much more focused and specialized than a firm that offers multiple services. When you work with a firm that only does bookkeeping you should get a much more powerful bookkeeping system compared to other services. Day in and day out we work with lots of different small businesses and have designed unique bookkeeping systems that meet their specific needs. Our extensive experience with small businesses bookkeeping and QuickBooks allows us to build powerful customized bookkeeping systems. Our past experience allows us to assess your bookkeeping needs and design a system that works for you. While we rely on our past experience we also know that each client's needs are different and we will have to tweak your bookkeeping system to meet your needs. We have the ability to think quickly on our feet and come up with a solution that works for each individual business. Our customized bookkeeping systems often lead to ah ha moments for clients because they are finally getting valuable information from their bookkeeping.
CPA's Focus On Taxes
While some CPA's and CPA firms do offer bookkeeping services it is not their main focus. CPA's should be used for tax returns, tax planning and other high level business financial tasks. CPA's often look at bookkeeping clients as a gateway to another tax client. They often have an internal bookkeeper or bookkeeping department so they most likely will not even handle the work themselves. Additionally I often find that CPA rates are much higher than just bookkeeping rates. You certainly don't want to be paying a CPA rate for bookkeeping work. I have also found that not many CPA's are QuickBooks certified and a fair number of them dislike QuickBooks for one reason or another. As I always say QuickBooks is great software for the small business owner that doesn't necessarily understand accounting. CPA's get accounting but not necessarily QuickBooks. While you may see value in having your bookkeeping and taxes serviced by one business there is a lot of value in separating them. We often get new clients that tell us they want to separate out their bookkeeping and CPA needs due to a negative experience they had in the past.
2 Different Perspectives
Another reason you may want to consider separating your bookkeeping and taxes is to get two different perspectives. Accountants don't always look at things the same way. Having a detail oriented bookkeeper that is involved in your bookkeeping process on a regular basis is like having your own financial watchdog. A good bookkeeper knows the financial aspect of your business inside and out. They should understand the regular transactions of your business much better than someone that only updates your bookkeeping once a month, quarter, or even per year. Your bookkeeper should hand over clean books to your CPA come tax time and be able to talk intelligently about your company's bookkeeping. Having two different professionals watching over your bookkeeping provides different perspectives which will benefit your business.
Having A CPA In Place Is Essential
I always recommend that every business has a CPA in place. It is definitely at the top of my list when meeting with a potential new client; "do you have a CPA in place?" If they do great, if they don't then I recommend that they find one ASAP. There are many obvious reasons for having a CPA, but from our perspective every business needs a CPA. There are definitely unique situations and transactions that come up when handling the bookkeeping for any client. Having a solid CPA to rely on to ask questions is very important to us. From a business owners perspective you want a CPA that understands your business as well as your financial life. Tax planning is important to both businesses and individuals and you need to consider your entire tax picture when choosing a CPA.
There is value in separating your bookkeeping from your CPA/tax needs. I think the biggest reason is specialization; let both your bookkeeper and CPA handle what they are best at. Your bookkeeper should handle your day to day bookkeeping, while your CPA focuses on tax planning and high level financial aspects.
Do you separate your bookkeeping from your CPA needs? Why or why not?