You notice an expense that looks wrong. A loan balance does not match. Payroll seems higher than expected. Then you start wondering whether the problem is something your bookkeeper should fix or whether you need to call your CPA. There is some overlap between the two.
Your bookkeeper usually deals with keeping records accurate and current. A CPA may need to get involved when the question moves into tax treatment, business structure, ownership changes, or other decisions that go beyond recording what happened.
At AF Bookkeeping, we help small and medium businesses keep the numbers organized so you have better information when a CPA does need to step in.
Which Bookkeeping Questions Can Your Bookkeeper Usually Handle?
Start with your bookkeeper when the question is about what is showing up in your financial records. Maybe your checking account will not reconcile. A customer payment was applied to the wrong invoice. You see the same vendor payment twice. Perhaps last month’s payroll numbers do not match what came out of the bank.
Those are the kinds of issues a bookkeeper can usually investigate. We can also help clean up old transactions, organize accounts, track unpaid invoices, record loans, and prepare reports.
A good rule of thumb is to ask whether you are trying to figure out what happened financially. If so, your bookkeeper is usually a good place to start.
When Does a Tax Question Need a CPA?
A transaction can be entered correctly in the books while still creating a tax question. Suppose your company buys a new vehicle for $55,000. Your bookkeeper can record the purchase, the loan, and any down payment. Deciding how that vehicle should be treated on the tax return may belong with your CPA.
The same applies if you are asking whether something is deductible, how a tax election works, or whether a decision could change what you owe. Timing matters here.
If you are considering a large purchase mainly because you think it will help at tax time, ask your CPA before you buy it. Do not make the purchase in December and then find out in January that the tax treatment was not what you expected.
What Financial Decisions May Require More Than Routine Bookkeeping?
Your books can show you that something is changing without telling you what decision to make next. Maybe sales are steady, but cash keeps getting tighter. Your bookkeeper can help you see whether expenses increased, customers are paying more slowly, or debt payments have gone up.
That gives you a clearer picture of the problem. You may still need additional advice before making a major financial move. Taking on a large loan, changing how owners get paid, making a major equipment purchase, or restructuring part of the company can raise tax and financial questions that deserve a CPA’s attention. The books provide the facts. The next decision may require a different type of advice.
When Should You Bring a CPA Into a Business Sale or Ownership Change?
Call your CPA early if the ownership of the business is about to change. That includes bringing in a partner, buying out an owner, purchasing another company, or preparing to sell your own.
Your bookkeeper can help get the financial records ready. Buyers and advisers may need current profit and loss statements, balance sheets, debt information, and details about assets. The CPA may need to look at how the deal is structured and what that structure could mean for taxes.
Waiting until everyone is ready to sign paperwork can make things harder. Some decisions are much easier to deal with before the deal is set.
How Can Payroll and Entity Questions Cross Into CPA Work?
Payroll is another area where the line can get blurry. If payroll expenses do not match the general ledger, your bookkeeper can trace the numbers and find the difference.
If you are asking how much salary an owner should take, that may be a different question. Entity decisions can work the same way. Your bookkeeper can keep records for an LLC, corporation, or other business structure. Deciding whether you should change the way the business is taxed may require advice from a CPA or tax professional.
Ask yourself what kind of answer you need. If you need help finding or recording a number, start with bookkeeping. If you need advice about what you should do for tax reasons, bring in your CPA.
What Should You Do When Bookkeeping Records Reveal a Bigger Financial Issue?
Sometimes routine bookkeeping uncovers something that has been wrong for a while. You may find that a loan has been recorded incorrectly for six months. Payroll taxes might not match the reports from your payroll provider. Money moving between two businesses could have been entered differently every month.
Do not start making adjustments just to force the numbers to match. First, find out what happened. We can trace transactions, compare statements, and identify where the records went off track. Once the problem is clear, you can decide whether a CPA, payroll company, lender, or another professional needs to get involved.
How Can Your Bookkeeper and CPA Work Together More Effectively?
Your CPA should not have to spend tax season figuring out why March’s bank balance was wrong. Regular bookkeeping makes those conversations much easier. It also helps to decide who handles what before something urgent happens.
Know who you call about payroll records, tax questions, year-end adjustments, financial reports, and notices from government agencies. You will save yourself a lot of back-and-forth later.
Improve Performance Tracking With Help From AF Bookkeeping
You do not need to send every financial question to your CPA. You also do not want to ask your bookkeeper to answer a tax question that belongs somewhere else.
At AF Bookkeeping, we help small and medium businesses keep accurate records and figure out what the numbers are actually showing. If something needs a CPA’s input, we can help make sure the records behind the question are ready.
That way, your CPA can spend time answering the real question instead of cleaning up six months of bookkeeping first. Schedule a virtual session with us and get help managing your accounting today.