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Do you need a CPA to do your small business accounting?

Do you need a CPA to do your small business accounting?

Entrepreneurs are creative types – they like big ideas and tend to shy away from dealing with the minutiae of running a business. For this reason, one of the most common responsibilities business owners want to take off their plate is bookkeeping, but it can be hard to understand what to look for in a finance partner. If you’re ready to outsource accounting for your small business, should you approach a CPA firm, or are regular bookkeepers enough?

CPAs vs. Bookkeepers

Before explaining the best option for outsourcing, it’s important to break down the difference between a CPA and a bookkeeper.

A bookkeeper (sometimes used interchangeably with the term “accountant”) is anyone who tracks and manages the cash flow of a business or an individual. Sometimes bookkeepers are formally trained in accounting, and some, like many business owners who do their own bookkeeping, are self-taught.

A CPA, on the other hand, is an accountant who has passed the CPA exam, a grueling four-part exam that takes 16 total hours to complete. CPAs have a more specialized knowledge of tax structure and tend to go into the tax preparation field, dealing with the IRS on behalf of their clients.

There are also non-CPA accountants that deal with tax filing, called enrolled agents, but the important difference to note as a business owner is that CPAs handle taxes, and bookkeepers take care of month-to-month managerial accounting.

Specialized Accounting

So exactly which type of accountant should your business partner with? The answer is both – for different purposes.

Since CPAs are usually focused on taxes, you’ll need the help of a trusted CPA partner to handle the complicated tax prep for your business. But for day-to-day accounting needs like bank feed reconciliation, calculating COGS, and monitoring net profits, CPAs won’t be much help.

For regular business accounting, you’ll need a knowledgeable bookkeeping team in addition to your CPA partner – and not just any accounting firm will do. Most firms don’t have the specialized knowledge necessary to really understand the nuances of e-commerce accounting, so it’s important to find a team that can speak to the specifics of your industry.

Overall, your e-commerce accounting partner will help you out with the ongoing upkeep of your finances. Your CPA partner will step in to complete the quarterly or annual project of filing your taxes. You’ll need the help of both to get the most out of your business.

Work With Us

Ready to partner with an e-commerce-focused bookkeeping team? Get in touch today with a free 15-minute discovery call, or book a one-time consulting call with one of our experts.

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