Bookkeeper vs CPA

What a bookkeeper does

• Records and categorizes daily transactions
• Reconciles bank, credit card, and merchant accounts monthly
• Produces P&L and balance sheet reports
• Manages AP, AR, and basic payroll workflows
• Keeps the books CPA-ready throughout the year

What a CPA does

• Prepares and files federal and state tax returns
• Advises on entity structure, owner pay, and tax strategy
• Represents you in front of the IRS
• Reviews or audits financial statements for lenders or investors
• Handles complex transactions (sales, acquisitions, equity grants)

Typical cost difference

• Bookkeeper: $40–$100/hour or $300–$800/month flat fee
• CPA: $150–$400/hour, plus annual return fees of $800–$3,500+
• Using a CPA to do bookkeeping work is the most common money leak in small business finance

Who to hire first

Most owners should hire a bookkeeper first to keep the books current, then engage a CPA quarterly or annually for tax work and planning. The bookkeeper feeds clean data to the CPA — that division of labor is what keeps fees down.