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Are Tax Pros the Best Bookkeepers?

Bookkeepers usually get on well with their clients’ CPAs and EAs. Bookkeepers create a good work rapport with their clients and as a group, they help their clients prosper and flourish. It is usually a success for everyone that is involved when they all get along and this ‘everybody’ refers to the bookkeeper, the tax professional and the client.

Even with all these, the tax professional and the bookkeeper sometimes find themselves competing against each other. A bookkeeper could have lost some bookkeeping clients to certified public accountants, CPAs, (a trusted financial advisor that help individuals, businesses and other organizations plan and reach their financial goals) or enrolled agent ,EAs, (a tax advisor that is a federally-authorized tax practitioner empowered by the U.S. Department of the Treasury) or to tax preparers because from a layman/client’s point of view, there is no need to work with all these people as they are one and the same when in fact they do different things. However, a lot of bookkeepers aren’t inclined to disagree with this theory. The tax professional be it the certified public accountant or the enrolled agent or any other tax professional has a different point of view which is opaque to the bookkeepers as tax professionals among others tend to see the client’s entire financial picture while all that bookkeepers can see or work with is the client’s business activities or receipts.

Bookkeepers tend to convince themselves that they are underqualified to help their clients and they are just as qualified. Many bookkeepers feel this way because they have no formal degree in accounting but they have either an associate’s degree or a certificate from a training program. Putting their degrees side by side with that of a certified public accountant who most likely has a Master’s degree or has spent the equivalent number of hours in college, and an enrolled tax agent who has a career that started after passing a 3-part comprehensive exam, may begin to help you understand just why bookkeepers feel unrated and undereducated.

While there are insecurities from a bookkeeper’s end, professional bookkeepers have an upper hand which their tax professional counterparts usually do not have. Some of the aforementioned advantages are:

Bookkeepers have more experience working for and with smaller businesses.
Bookkeepers have both formal and non-formal extensive training on popular small business accounting software
Bookkeepers have a very intimate knowledge of the daily operations of clients’ businesses
Bookkeepers tend to focus on the managerial side of small businesses accounting and what each client needs from their bookkeeping in order to run their company

Certified public accountants and enrolled agents usually view bookkeeping as an activity which must be done in order to prepare the tax returns. Their sole focus is usually on making sure that the numbers look presentable from a tax perspective. While it is not a tax professional’s job to understand the ins and outs of bookkeeping, a certified public accountant might be versed in bookkeeping and also understand small business accounting software, however, their education prepared them for consultation and analysis and not bookkeeping. In the same way, EAs are well versed in the tax code and they use it to ensure that their clients are paying as little tax as it is legally possible. Bookkeeping is not the primary focus if an enrolling agent but in a case that one of their clients gets in trouble with the IRS, an EA will be able to step in and represent the client.
At the end of the day, Bookkeepers, certified public accountants, enrolled agents and other tax professionals just have their client’s best interest at heart even if their perspectives on this is differ slightly .
These are some things which bookkeepers can do to avoid being in competition with their client’s tax professional:

  • It’s not a War
  • When you build a rapport with the CPA, EA or the tax preparer and there is mutual respect on both ends, they will be less likely to try to take on your role as a bookkeeper. If your relationship is good, they could refer you to other clients and convince a client who is looking to hire a new bookkeeper to take your place. This good relationship benefits everyone in this group and results in a faster, more efficient workplace.

  • Educate your client
  • While this seems pretty straightforward, you need to completely understand the need to make your client to see things from your perspective. It’s up to you to diligently enlighten your client on the need to have a bookkeeper. A caveat however, is to avoid playing down the role of the tax preparer.

    As a bookkeeper, you are qualified to help your client with the tools he or she will need to run their business effectively on a daily basis. Tax professionals usually have a different view on the uses of small business bookkeeping and this will mean that they may not the best people to handle the routine bookkeeping that small businesses need. As a bookkeeper, you have to understand your values so that you can confidently work closely with your client’s tax professionals so as to make sure that your clients benefit from both of your talents.

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