Managing your finances can be a task of trying to herd cats. Bills, taxes, and receipts pile up fast. You wonder, why do I need an accountant and a bookkeeper? Both of these professionals have their own work to perform in taking care of your finances, but do you require one, two, or none? Let's talk about whether or not it is worth hire an accountant, a bookkeeper, or both
Who Is an Accountant?
An accountant is a planner of money. They go over your money, prepare your taxes, and give big-picture advice. They are similar to the planners of your future finances. They possess certifications like Certified Public Accountant (CPA) or Enrolled Agent (EA), with the backing of US tax law knowledge. Their work includes -
- Preparing and filing tax returns.
- Advising on tax-saving strategies.
- Creating financial plans for goals like retirement.
- Representing you in IRS audits.
Accountants focus on high-level tasks, ensuring compliance and optimizing your wealth.
Who Is a Bookkeeper?
A bookkeeper is a meticulous record keeper. They monitor your transactions day to day, making sure they all add up. Imagine them as the ground floor of your financial building. Their work involves-
- Recording income and expenses.
- Reconciling bank statements.
- Managing invoices and payments.
- Maintaining organized financial records.
Bookkeepers don’t need formal credentials, but many are certified through various programs. They lay the groundwork for accurate accounting.
Key Differences Between Accountants and Bookkeepers
Understanding their roles helps you understand and answer, why do you need an accountant? Here’s how they differ -
Scope of Work
Bookkeepers handle routine transactions. They log daily sales, pay bills, and track cash flow. Accountants take those records and analyze them. They prepare tax filings, forecast budgets, and advise on financial decisions.
Expertise Level
Accountants require advanced training, often with degrees and licenses. They navigate complex tax codes and regulations. Bookkeepers need less formal education, focusing on accuracy and organization.
Cost
Bookkeepers are generally cheaper, at $20-$50 an hour or $200-$600 a month part-time and $500-$2,500 per month full-time. Accountants are more costly, at $100-$400 per hour, or $150-$2,000 per return, depending on complexity.
Time Commitment
Bookkeepers work regularly, often weekly, to keep records current. Accountants may engage monthly, quarterly, or during tax season, focusing on strategic tasks.
When Do You Need a Bookkeeper?
Certain situations highlight the need a bookkeeper. Let’s explore them.
You Have Frequent Transactions
If you’re running a side hustle or small business, transactions add up. Sales, vendor payments, and subscriptions need tracking. In 2024, 26% of US adults had a side gig, creating bookkeeping demands. A bookkeeper keeps these records tidy, preventing chaos.
You Lack Time for Record-Keeping
Busy with work or family? Manually tracking expenses is time-consuming. A bookkeeper takes this off your plate. They ensure every dollar is accounted for, saving you hours.
You’re Preparing for Tax Season
Messy records make tax prep a nightmare. Bookkeepers organize your finances, making it easier for an accountant to file taxes. Accurate books reduce errors and speed up the process.
You Want Real-Time Financial Insights
Bookkeepers provide up-to-date financial snapshots. They reconcile accounts and flag discrepancies. This helps you monitor cash flow and avoid overspending.
When Do You Need an Accountant?
Accountants shine in specific scenarios. Here’s when to hire one.
You Face Complex Tax Situations
Multiple income streams, investments, or rental properties complicate taxes. In 2025, the IRS projects 160 million individual returns, many with intricate schedules. An accountant ensures compliance and maximizes deductions.
You Need Strategic Financial Advice
Planning to buy a car or invest in stocks? Accountants forecast how these decisions impact your finances. They recommend tax-efficient strategies, like timing asset sales.
You’re Starting or Scaling a Business
Launching a business involves tax IDs, deductions, and compliance. Accountants guide you through setup and growth, ensuring you meet federal and state rules.
You’re Dealing with an IRS Issue
Received an IRS notice? In 2024, audits targeted 0.5% of high earners. Accountants handle audits, prepare documentation, and negotiate on your behalf.
Do You Need Both an Accountant and a Bookkeeper?
Sometimes, one isn’t enough. Here’s when you might need both.
You Run a Growing Business
Small businesses with steady transactions need bookkeepers for daily records. Accountants then use those records for taxes and planning. In 2023, 33.2 million US small businesses relied on this combo for efficiency.
Your Finances Are Multifaceted
If you have a day job, freelance income, and investments, bookkeeping keeps transactions organized. An accountant ties it all together with tax strategies and wealth planning.
You Want to Scale Financial Operations
As your income or business grows, financial tasks multiply. Bookkeepers handle the volume, while accountants provide oversight and strategy. This teamwork prevents costly mistakes.
You Value Efficiency
Bookkeepers and accountants complement each other. Accurate books save accountants time, reducing their fees. Together, they streamline your finances, freeing you to focus elsewhere.
When Can You Skip Hiring Either?
Not everyone needs both professionals. Here’s when you might manage without them.
Simple Finances
If you have a single W-2 income and few expenses, tax software handles your needs. Basic budgeting apps can replace bookkeeping for minimal transactions.
Limited Budget
If funds are tight, prioritize based on need. A bookkeeper suffices for record-keeping, while an accountant is key for complex taxes. DIY tools can bridge gaps temporarily.
Strong Financial Skills
Comfortable with handling a calculation tool or tax laws? You might handle bookkeeping or simple taxes yourself. But as complexity grows, professionals save time and money.
How to Decide What’s Right for You
Still wondering, why do you need an accountant or a bookkeeper? Ask these questions -
- How many transactions do I handle monthly?
- Are my taxes simple or multifaceted?
- Do I have time to manage records?
- Am I facing financial decisions like investments or business growth?
- Can I afford professional help?
If transactions are frequent or taxes are complex, consider both. For simpler needs, one may suffice. Weigh costs against benefits to decide.
Costs of Hiring an Accountant vs. a Bookkeeper
Budget plays a role in your decision. Here’s what to expect in the US -
- Bookkeeping - $20-$50/hour or $200-$600/month for part-time employment. Full-time bookkeepers may cost $40,000-$60,000 when it comes to an annual basis.
- Accounting - $150-$600 for basic tax returns; $800-$2,000 for complex ones. Hourly rates range from $100 to $400. Financial planning costs $500-$3,000 yearly.
Costs vary by location and expertise. Rural areas charge less than cities like Los Angeles. Compare quotes to find affordable options.
How to Find the Right Professionals
Ready to hire? Follow these steps -
Research Credentials
For accountants, choose CPAs or EAs. Verify licenses via state boards or the IRS. Bookkeepers may have certifications from AIPB. Check and cross-verify their qualifications.
Seek Relevant Experience
Hire professionals familiar with your needs. For example, a bookkeeper experienced in e-commerce suits online sellers. Accountants with startup expertise help entrepreneurs.
Request References
Ask for client feedback or check reviews on Google. Positive testimonials signal reliability.
Use Trusted Sources
Find bookkeepers on online platforms. For accountants, check the AICPA or NAEA directories. Referrals from colleagues also work.
Tips for Working with Your Accountant and Bookkeeper
Maximize their value with these strategies -
- Share Clear Records - Provide digital copies of receipts or bank statements.
- Communicate Needs - Explain your goals, like tax savings or business expansion.
- Set Regular Check-Ins - Meet bookkeepers weekly and accountants quarterly.
- Use Software - They use various tools to be able to streamline their work.
Also Read | Do You Need an Accountant? Key Signs for Small Business
Final Thoughts
Deciding why do I need an accountant and a bookkeeper depends on your financial needs. Bookkeepers keep daily records organized, ideal for frequent transactions. Accountants tackle taxes and strategic planning, crucial for complex finances. Small business owners or those with diverse incomes often need both. If your finances are simple, software or one professional may suffice. Assess your transactions, tax complexity, and budget to choose. Research credentials, compare costs, and use trusted platforms to find the right fit. With an accountant, bookkeeper, or both, you’ll master your finances and gain peace of mind. Start exploring your options today at The Fino Partners!
