In most businesses you need both, but to save costs, the degree with which you employ one or the other depends on you industry, size, unique business situation, among others. For smaller consulting firms and independent consultants, you probably only need a CPA once or twice a year, but could really use a bookkeeper more steadily throughout the year. So what do you need each for?
Accountant (CPA) – you need one now and then
Your accountant is your finance and tax wiz that should help provide overall strategic direction for your finances. They should know (and have experience navigating) the tax laws in your state, and generally provide solid financial advice/strategies for achieving your consulting practice’s goals/objectives. Additionally, they should understand both you and your company’s overall financial position, long-term goals/objectives, and industry trends. Here are some situations in which your accountant can help your consulting practice:
- Applying for a new line of credit to cover short-term staffing needs
- Filing tax returns
- Creating a new business entity (e.g., LCC, Inc)
If you don’t have an accountant yet, you can search for one through the following:
- Your state CPA society
- The National Society of Accountants (NSA)
- The American Institute of Certified Public Accountants (AICPA)
In short, you probably need an accountant, but unless you need to secure credit or take out a loan, you probably only need to work with this person once or twice a year.
Bookkeeper – you need one frequently
Your bookkeeper handles your day-to-day accounting. If your consulting practice is firing on all cylinders, you probably have a litany of small expenses to track – parking at client site, Uber rides, coffees with colleagues, client lunches, conference fees, software subscriptions, home office expenses – the list goes on. These are expenses you should track to maximize your income and tax position, but at the same time it’s tedious and not worth your time. You also don’t want to pay accountant-sized fees for this labor, hence, the bookkeeper role.
A bookkeeper would be a good person to help you with the following:
- Keep financial records (in particular expenses!) updated and accurate
- Keep you regularly informed of your finances
- Submit invoices
- Chase down payments from your problem clients
- Paying your practice’s bills
Saving Money. If you are billing your consultants out at $120/h, and your bookkeeper costs only $200/month, well, you can see how it’s probably more profitable for you to hire a bookkeeper and focus on client work. Not to mention the potential savings and opportunities a bookkeeper can find – maybe you’re not taking all the deductions you could, or maybe you can afford to spend more on wining and dining potential clients. All of this is more readily apparent if someone is keeping your books current and making the information visible, allowing you to make early decisions that can save money.
Location. Unlike your accountant, your bookkeeper should have no problem operating state-agnostic, and these days you shouldn’t need to be bothered to meet face-to-face. Many businesses find that one or two quick meetings a month are sufficient for keeping updated, and the bookkeeper can keep things organized from afar.
Why Deo Bookkeeping?
First, if you need CPA services, that’s clearly not us, but we’re glad to put you in touch with one of our partners. On the other hand, if you’re spending too much time on administrative tasks like bookkeeping, we’d be glad to jump in and help you save time and money with your day-to-day.
We’re Consultants Too. The thing we bring that others do not is several years of management consulting experience. Since we’re already involved with our clients’ day-to-day transactions, we’re familiar with their businesses, and updated on the latest developments. Therefore, in addition to saving you time and money with bookkeeping, we can also help take some of that client work off your plate.
Rather than sifting through resumes and breaking in new talent every time you need a little help with a deliverable or proposal, with us you can call upon professionals you already know and have a rapport, skip all the onboarding, and finally knock out that work product that’s been keeping you in the office when you could be at home with your family, at the gym, catching up on Game of Thrones…whatever it is you like to do with your time. No doubt, Tyrion Lannister would hire a bookkeeper consultant so he could enjoy a few glasses of wine…
Hiring a bookkeeper will save you time keeping your business organized, but hiring a bookkeeper/consultant can potentially save you time running all aspects of your business. Check us out here or contact us (firstname.lastname@example.org) to see if we can help!