| You might have heard about Aliens vs. Predators. | | | | mean and be able to explain it to you in a way that |
| They are two different species from two different | | | | makes perfect sense. |
| galaxies. In the accounting world, it can sometimes | | | | This information on what's happening in your business |
| seem like that as well, and since I've had client recently | | | | should be used by you to make the business more |
| ask me what the difference is between bookkeepers, | | | | profitable. |
| accountants and CPA's, I've decided to write this | | | | When you choose an accountant, (see all the negative |
| article to show you the differences and also point out | | | | things about the bookkeeper, and multiply by two), you |
| what to look for when you hire one. | | | | have to be more careful! Why? Because if the |
| Bookkeeper: Is just that, a keeper of the books. It helps | | | | accountant is responsible for deadlines, payroll taxes, |
| if this person is meticulous and very organized. A | | | | sales taxes, estimated payments, these things are time |
| bookkeeper should know QuickBooks software cold, | | | | sensitive. If these deadlines are missed, you could be |
| know how to do bank reconciliations and have a very | | | | looking at large dollar penalties and interest charges, so |
| good knowledge of "where things belong." They need | | | | you have to notice if the accountant waits for the last |
| to know the differences between the following: | | | | minute, because then you have a problem. |
| 1. Assets | | | | CPA: These folks should know what the bookkeeper |
| 2. Liabilities | | | | and the accountant know and should be able to |
| 3. Income | | | | prepare the financial statements so they can be used |
| 4. Expenses | | | | by investors, potential buyers, banks and lending |
| If your bookkeeper doesn't know which is which, you | | | | institutions. Most CPA's have a pretty good grasp of |
| won't know if you're making or losing money. | | | | what is right and wrong in the eyes of the Internal |
| So how would you know if your bookkeeper isn't a | | | | Revenue Service. |
| "keeper" as we say? If they are disorganized! The tell | | | | The question I want you to ask yourself is, "Is my CPA |
| tale signs are a desk that looks like a bomb hit it, with | | | | making money for me?" If the answer is no, what do |
| papers all over the place. Their appearance may be | | | | you need him for? Very few CPA's are savvy |
| quite disheveled. When they are making a collection | | | | business people. They understand taxes and financials |
| call, there is a proper way to handle that. Remember, | | | | but don't understand how the business side of things |
| the person is speaking to your customers and is a | | | | work. What new business idea does your CPA supply |
| reflection of you. How do you want the outside world | | | | you with? |
| to perceive you and your business? | | | | Remember, you get what you pay for. If you have a |
| Another thing to factor in is transparency. If the person | | | | guy you are paying $500 a month to and at the end |
| gets hit by a truck, do you know where everything is? | | | | of the year he prepares your tax return, what you |
| Is the person computer savvy? There are a number | | | | have is a $6,000 tax preparer. If you are paying $2,000 |
| of bookkeepers who are very old school. "This is the | | | | a month and all the guy does is prepare your taxes, go |
| way it was done." That might not serve you as there | | | | hire the $6,000 preparer - it's a better deal. |
| is so much new technology around. | | | | How does a CPA make you money? If your business |
| Be on the lookout also of having the same person | | | | is successful, how can it be more successful? A CPA |
| doing everything. For example, if your bookkeeper is | | | | should have the ability to analyze the business and tell |
| preparing checks to be signed, another person should | | | | you what you are doing right and wrong. If you are |
| be signing the checks, not the bookkeeper. The bank | | | | doing everything right, do nothing and stay on course. |
| reconciliation should be prepared by a third party. This | | | | Not doing so well" Ask why. What changes have to |
| is designed for your protection. We've all heard stories | | | | be made to turn the business around? |
| of business owners being blindsided by thievery and | | | | When things are going poorly, what people look to do |
| so just be aware to have different people doing these | | | | is cut back on expenses... but you should ask, "Am I |
| various functions. | | | | getting what I am paying for?" You may be better off |
| Accountant: Besides knowing what the bookkeeper | | | | by hiring a very expensive CPA who will do something |
| knows, which by the way, most accountants don't, the | | | | versus someone who's not going to do anything. |
| accountant should know what the financial statements | | | | |