Bookkeeper vs Tax Preparer | What's the Difference?

Bookkeeper

• Keeps track of all business transactions and appropriately categorizes them for your tax preparer
• Creates digestible financial data including, but not limited to, your profit, highest earning revenue stream, profit percentage & more
• Reconciles your books to your bank statements to ensure everything is accounted for

Tax Preparer

• Their sole purpose is to prepare and file your tax returns
• Needs to know how much revenue your business has made to ensure you are paying the proper amount of taxes
• Ensures your business is properly deducting expenses related to the business

To sum it up: 

A bookkeeper gives you meaningful data to use within your business and a tax preparer gets your taxes done using the foundation provided by bookkeeping.

If you show up with a mess of business receipts to your tax preparer, they will charge you an extra fee to get everything organized (likely a pretty penny).

They need your financial transactions organized (aka bookkeeping) so that they can prepare your tax return. But if you are paying to have your transactions organized for taxes, wouldn't you want to get more out of it? At the end of the day your financials need to be organized, but if you are waiting until taxes are due to get on top of it, you are missing out on all the benefits that keeping your books up-to-date ~consistently~ provides. And by consistent, I mean that your books should be updated every month. Not every few months that you think “Oops I haven’t recorded or reconciled anything for a bit. I should add it to my to do list next week.”

Whether you do it yourself or decide to outsource, empower your business by knowing it’s financial health during all stages and not just at year-end. Bookkeeping can be a business tool if you do it right!

Would you rather pay to have it done at the end of the year, or pay throughout the year and be able to use the data to drive your business choices? Either way, you will be paying to have your books done. It’s up to you to get something out of it and not just check a box.

Here are a few benefits that come with up-to-date books:

💌 knowing down to the penny how much you are profiting (or losing)

💌 knowing the cost of your expenses, broken down into categories such as advertising, subscriptions, contractors, etc.

💌 more accurately estimate how much to save for your quarterly taxes

💌 knowing how much you can pay yourself on a regular basis

💌 knowing the above data allows you to pivot throughout the year and can make all the difference in increasing your profits

If you are ready to use bookkeeping as a tool in your biz and don’t want to have to do it all yourself, click here to work with us!