What a bookkeeper does
Bookkeeping is the recording layer: categorizing every transaction, reconciling every account against bank statements, running payroll, invoicing, paying bills, and closing the books monthly so reports mean something. It's operational, continuous, and detail-heavy, the financial equivalent of keeping the shop floor clean and the inventory counted. Done well, it's also where owners get their most useful numbers: job margins, labor percentages, cash trends.
There's no license requirement to call yourself a bookkeeper, which cuts both ways: pricing is accessible ($300–$1,500/month for most small businesses), but quality varies wildly. Certifications. QuickBooks ProAdvisor tiers, Intuit's bookkeeping certification, are the verifiable signal, since anyone can claim 'experience.'
What an accountant does
Accounting is the interpretation layer: taking recorded numbers and turning them into meaning, accrual adjustments, depreciation schedules, financial statements, tax strategy, forecasts. 'Accountant' is also an unlicensed title, typically implying an accounting degree and broader technical training than bookkeeping requires.
The practical overlap: much of what small businesses call 'my accountant' is really two services, bookkeeping done monthly and a tax return done annually. Naming them separately matters, because they're priced separately, and mispriced bundles usually hide weak bookkeeping under an impressive title.
What a CPA is
Certified Public Accountant is the licensed tier: a state-issued credential requiring roughly 150 credit hours, a famously hard four-part exam, experience requirements, and continuing education. CPAs can do things nobody else can, audited and reviewed financial statements, and representation before the IRS (a power shared with attorneys and Enrolled Agents). CPA firm rates run $150–$300+/hour.
What surprises many owners: for tax representation specifically, an Enrolled Agent (EA), the IRS's own credential, carries the same unlimited practice rights before the IRS as a CPA, usually at lower rates. And many CPA firms outsource their clients' monthly bookkeeping to firms like ours, then review the output. The license matters where the license matters; it doesn't make categorizing transactions any better.
The setup that actually works for most small businesses
- Under ~$150K revenue, no employees: DIY books (done monthly, honestly) + a tax preparer in the spring.
- Growing service business, employees, real volume: a professional bookkeeper monthly + tax preparation built on those books. This is the range where most owners overpay a CPA firm for bookkeeping or underpay a cheap bookkeeper and get cleanup bills later.
- Complex situations, audits, multi-entity structures, investors, attest requirements: bookkeeping firm for the monthly layer, CPA for the work that requires the license.
Why splitting books and taxes across two providers goes wrong
The traditional arrangement, bookkeeper here, tax preparer there, fails at the seam. The preparer inherits books they don't trust, re-asks questions the bookkeeper already answered, bills for cleanup work, and files an extension while everyone points at each other. Every April, this exact story.
It's why we run books-first with tax built on top: Steady prepares returns only for clients whose books we keep ourselves. Twelve monthly closes mean the return starts 90% done, quarterly estimates come from real numbers, and there is no seam for problems to hide in. Business Tax Preparation Services
Cost comparison at a glance
- Bookkeeper: $300–$1,500/month, recording, reconciling, payroll, monthly close
- Accountant: $100–$200/hour, statements, adjustments, planning
- CPA firm: $150–$300+/hour, everything above, plus audits, attest work, representation
- EA (Enrolled Agent): tax preparation and full IRS representation, typically below CPA rates
Frequently asked questions
Can a bookkeeper do my taxes?
Anyone preparing returns for pay needs an IRS PTIN; credentials beyond that (AFSP participation, EA, CPA) signal training and grant IRS representation rights at the EA/CPA level. The question to ask any preparer: what's your PTIN, what credentials back it, and are you in the IRS preparer directory? (Ours: an active IRS PTIN, with AFSP participation and EFIN authorization in progress. About Steady )
Do I need a CPA if I have a bookkeeper?
Only for what the license is required for: audits, reviewed statements, and situations where you specifically want CPA representation. A well-kept set of books plus a credentialed tax preparer covers the vast majority of small business needs, and when you do need a CPA, clean books cut their bill dramatically.
What's the cheapest safe setup?
Honest DIY bookkeeping (monthly, with reconciliations) plus a credentialed preparer at tax time, until volume or payroll makes DIY unrealistic. The expensive setups are the incoherent ones: CPA rates for bookkeeping, or bargain bookkeeping that generates cleanup projects.