How Combining Your CPA and Bookkeeping Services Can Boost Your Business

Financial management is the foundation of every successful business. However, managing business finances is not easy.

You have to avail yourself of the expertise of a certified public accountant (CPA) and bookkeeping services.

Many small business owners combine their accounting and bookkeeping operations under one roof. Combining your CPA and bookkeeping services could be the game-changing strategy they didn’t know they needed! 

Imagine having expert strategists on one side, focusing on tax planning and financial insights, while meticulous bookkeepers manage every transaction with unwavering attention to detail.

Enter — doola’s All-In-One Accounting package — so you can unlock new insight, efficiency, and growth levels for your business! 

Let’s check the lucrative benefits of professional bookkeeping and CPA services and discover how they can lead to smarter decisions, better compliance, and a thriving bottom line!

Role of Bookkeeping and CPA in a Business

As a business owner, you are responsible for managing your company’s finances effectively.

This requires accurate bookkeeping practices and compliance with taxation laws, which can get overwhelming on your own.

This is where CPAs and bookkeeping services come into play.

These professionals provide valuable assistance in managing your company’s financial records, ensuring compliance with tax laws, and offering financial advice that can help boost your business’s performance.

​​A bookkeeper records every financial transaction of your business so that reconciliation reports are accurate.

Since their main responsibility is maintaining a ledger, they often use digital bookkeeping software to document financial activities.

They also work on:

• Recording transactions related to business expenses and income

• Reconciling bank and credit card accounts

• Managing payroll data reconciliation

• Reviewing and adjusting the general ledger

• Filing tax reports and processing payments

A CPA is a board-certified accounting professional who has passed the Uniform CPA Exam administered by a state’s Board of Accountancy.

While a bookkeeper builds accurate financial records for the company, a CPA analyzes these records to provide financial advice and maintain compliance.

Their responsibilities may also include:

• Verifying and analyzing financial records

• Conducting financial audits

• Preparing financial records (such as tax returns, income statements, and balance sheets)

• Providing information for forecasts, business trends, and opportunities for growth

• Generating reports based on financial reports

• Assisting business owners in understanding the financial impact of their decisions

By outsourcing bookkeeping services to a partner with expertise in tax regulations, you can rest assured that all necessary taxes are paid accurately and on time while minimizing tax liabilities through appropriate deductions.

The Traditional Approach: Separate Bookkeeping and CPA Services

Bookkeeping and CPA services are essential for businesses of all sizes. By outsourcing these services or hiring dedicated professionals for each area, you can ensure accuracy in financial reporting, compliance with tax laws, and insights into your business’s financial health.

However, most businesses hire separate bookkeeping and CPA services, which means that two persons or firms are responsible for recording financial transactions daily and filing tax returns and other complex financial documents.

While this traditional approach of bookkeeping and CPA services may seem convenient, it can create significant drawbacks for your business.

Without a single individual or firm overseeing each aspect, errors or fraudulent activity may go unnoticed.

Another disadvantage is that using two service providers for bookkeeping and CPA services limits your options.

If you are dissatisfied with their performance or fees, finding an alternative can be challenging since you are completely dependent on them to manage all aspects of your finances.

Drawbacks of Separating CPA from Bookkeeping

While separate CPA and bookkeeping services may seem like an easy solution for managing your finances, they can actually hinder your business’s growth and success.

Here are some drawbacks of combining these services and how separating them can benefit your business.

1. Limited Expertise

One drawback is limiting yourself to one individual or firm’s expertise. Entrusting both tasks to a different person or firm may not result in the most accurate and efficient service for your business.

A CPA may be well-versed in tax laws and financial reporting.

Still, they may not have the same knowledge and experience in bookkeeping tasks such as data entry, bank reconciliations, and accounts payable/receivable management. 

Combining your CPA and bookkeeping services allows each professional to focus on their areas of expertise without compromising their quality or efficiency.

This ensures that your financial records are accurate, up-to-date, and ready for the tax season.

2. Conflict of Interest

Another drawback is that there could be a conflict of interest between your CPA’s advisory role and their involvement in day-to-day bookkeeping tasks.

As a business owner, you rely on your CPA for unbiased financial advice and guidance. 

However, if they are not responsible for maintaining your books, they may prioritize their main tasks over tedious bookkeeping.

By combining your CPA and bookkeeping services, you can ensure each task receives the necessary attention and expertise.

By having a single dedicated service provider for each role, you can rest assured that these tasks will be handled accurately and effectively.

3. Higher Costs

The convenience factor of having two people or firms handle all your accounting needs comes at a cost – literally.

Separating these services and managing them in-house often means hiring more resources and paying a hefty amount.

On the other hand, combining these services also helps optimize resources within your business.

Outsourcing these services to a one-stop bookkeeping solution with specialized professionals can provide more tailored services at competitive rates.

By hiring one partner to manage bookkeeping and CPA services, you can negotiate a better price or opt for hourly or fixed fees depending on your specific requirements.

4. Lack of Checks and Balances

Separating CPA and bookkeeping services also eliminates the need for a consolidated system of checks and balances within your financial processes.

Without different individuals or teams overseeing different aspects of your finances, there is a higher risk of errors or fraud going undetected.

Combining these roles also adds a final layer of checks and balances within a company’s financial management system.

Since both bookkeeping and CPA teams work together, they can check other’s work for an added level of scrutiny when identifying potential errors or discrepancies in financial records. 

This helps maintain transparency and mitigates the risk of fraud or mismanagement.

Plus, there is no conflict of interest regarding financial reporting, as the same individual or team performs both functions.

5. Time Constraints

Time is a valuable commodity for small business owners, especially when trying to grow their businesses.

Separating CPA and bookkeeping services adds more tasks to one person’s workload, leading to delays in completing critical financial tasks and reports.

Bookkeeping requires meticulous attention to detail and often involves repetitive tasks that must be done regularly to ensure accurate record-keeping.

On the other hand, CPAs need time to analyze data, prepare tax returns, conduct audits, and provide valuable insights into a business’s financial health.

If two people or companies are responsible for both roles simultaneously, there is a risk that they will prioritize one task over the other due to time constraints.

This could result in delayed tax filings or incomplete financial analysis, negatively impacting a business’s operations.

Combining these services allows you to save time by having your CPA spend time on bookkeeping and bookkeepers help with accounting.

By taking help from someone who also specializes in that area, your bookkeeper and CPA free up more time to focus on providing expert advice for growing your business.

Benefits of Combining Bookkeeping and CPA Services

There are significant benefits to combining bookkeeping and CPA services and outsourcing them to specialized professionals.

By assigning each role to a single specialist, you can ensure that all aspects of their financial management are handled accurately and efficiently.

Another advantage of combining CPA services is the ability to tap into each other industry-specific expertise.

Many CPAs specialize in serving businesses within particular industries, while bookkeepers have more hands-on experience in managing books.

This means they have an in-depth understanding of those sectors and can provide valuable insights into improving profitability and compliance.

✅ 1. More Time and Resources

When different persons or teams handle your CPA and bookkeeping needs, they often juggle multiple responsibilities at once.

However, outsourcing these services to a single professional or firm ensures that each task receives the necessary time and attention.

Bookkeeping requires meticulous attention to detail, as even minor errors can significantly affect your business’s finances.

Having a dedicated bookkeeping and accounting firm that is solely focused on maintaining accurate records reduces the risk of costly mistakes.

This helps them analyze financial data and provide valuable insights for decision-making, conduct thorough audits, prepare tax returns, and provide strategic financial planning.

Outsourcing also provides access to advanced technology and tools used by professional bookkeepers and CPAs.

These tools streamline processes and ensure accuracy and compliance with legal regulations. Thus, you save a lot since investing in such resources would incur high costs.

✅ 2. Improved Accuracy in Financial Reporting

By combining your CPA and bookkeeping services, you can significantly improve the accuracy of your financial reporting.

Each service plays a distinct role in the financial management process. Combining these two services allows a collaborative approach for both bookkeeping and CPA-related tasks.

Moreover, having a CPA review your books provides an unbiased assessment of your company’s finances.

This reduces the risk of errors or fraudulent activities going unnoticed within your organization by providing an additional layer of checks and balances.

By outsourcing bookkeeping services to the same resource, you can prevent the repetition of tedious administrative tasks associated with managing finances.

This allows them to focus on more critical aspects of running their business while still having access to reliable reports.

✅ 3. Better Tax Planning and Savings Opportunities

One key advantage of combining your CPA and bookkeeping services is the opportunity for better tax planning and savings.

Having a dedicated CPA and bookkeeping service provider solely focused on tax strategy allows businesses to take full advantage of any available tax deductions and credits.

CPAs are trained professionals who analyze a business’s financial situation and provide tailored advice on minimizing tax liability while maximizing savings opportunities. 

Bookkeepers are also crucial in tax planning since they maintain accurate and organized financial records.

By working together, CPAs can easily access necessary information when preparing taxes, reducing the risk of errors or missed deductions.

Also, the bookkeeping team knows what to focus on in terms of long-term tax planning rather than just filing annual returns.

They can work closely together throughout the year to identify potential areas for savings, such as implementing retirement plans or making strategic investments. 

✅ 4. Increased Productivity

Combining your CPA and bookkeeping services can significantly increase your business’s efficiency and productivity.

Both roles have distinct responsibilities that require specific skill sets, and having a single individual or team dedicated to these tasks allows for a more streamlined approach to financial management.

This cohesion also leads to increased accuracy in financial reporting. By entrusting your tax-related tasks solely to a CPA, you can be confident that all filings will be accurate and compliant with current laws.

Similarly, having a dedicated bookkeeper ensures that all financial records are always up-to-date and accurate.

By coming together, they will help you with decision-making and simplify the process during audits or when preparing financial statements for potential investors or lenders.

With tasks handled by professionals who specialize in their respective fields, business owners can have peace of mind knowing that their financial management is in capable hands.

Streamline Your Business Finances with doola

At doola, we understand that handling bookkeeping and CPA tasks separately can be time-consuming, confusing, and prone to errors.

That’s why we offer comprehensive bookkeeping and CPA services under one roof, making managing your business finances easier.

doola’s bookkeeping services are designed to help you accurately track all your financial transactions.

Our team will record income, expenses, invoices, bank statements, payroll details, and more. With our efficient bookkeeping services, you can always stay up-to-date and ready for tax season.

Book a demo today, and let us take care of the numbers while you focus on growing your business.