This is an interesting topic of what the expectation is from each party. My wife and I run an accounting shop (mostly bookkeeping) and then I do contract controller work. I’m a CPA, but have never done taxes. The gap in what clients expect knowledge wise is hard to balance. And I don’t mean from bookkeeper to CPA. Even within basic acct work that is prevalent.
I go with the below parameters:
Bookkeeper - I call them process accountants. Usually don’t know the debit/credit logic, but understand the system and this is a deposit, check, etc. Books should be at least 60-70% accurate with some accruals, prepaid type stuff likely being cash basis. Likely don’t understand the ins and out of payroll but can process it. Don’t know much about taxes.
Accountant - Books should be 90%+ correct. Could answer most questions from an average small business. Provide increased clarity into the financials vs printing out a P&L and sending via email. Can handle payroll ins and outs and can talk to a CPA about taxes intelligently.
CPA - in theory all the above. I’ve found they’re a little lazy when it comes to the pure accounting work, but they should be able to handle tax stuff and the above.
This is an interesting topic of what the expectation is from each party. My wife and I run an accounting shop (mostly bookkeeping) and then I do contract controller work. I’m a CPA, but have never done taxes. The gap in what clients expect knowledge wise is hard to balance. And I don’t mean from bookkeeper to CPA. Even within basic acct work that is prevalent.
I go with the below parameters:
Bookkeeper - I call them process accountants. Usually don’t know the debit/credit logic, but understand the system and this is a deposit, check, etc. Books should be at least 60-70% accurate with some accruals, prepaid type stuff likely being cash basis. Likely don’t understand the ins and out of payroll but can process it. Don’t know much about taxes.
Accountant - Books should be 90%+ correct. Could answer most questions from an average small business. Provide increased clarity into the financials vs printing out a P&L and sending via email. Can handle payroll ins and outs and can talk to a CPA about taxes intelligently.
CPA - in theory all the above. I’ve found they’re a little lazy when it comes to the pure accounting work, but they should be able to handle tax stuff and the above.