Like any niche, money management has its own list of terms. Two of the terms you probably hear often are CPA and bookkeeper. Often they are used interchangeably but they are two different people that do two very different things!
What’s the difference?
A CPA (certified public accountant) files your business’s tax return and makes sure you are saving money where you can when it comes to creating tax strategies. They also help business owners minimize their tax liability. A CPA is an important part of your business’s team when it comes to filing your tax return and preparing for taxes. But business is more than just taxes, right?
Why you need a bookkeeper
A bookkeeper is the person who helps you set up an accounting software and see where your hard-earned money is going. Your bookkeeper will ensure that your profit and loss statements are telling your money story.
So when you look at your P&L you will be able to say “I’m spending 40% of my gross revenue on advertising and marketing.” or “Oh, wow, I am spending 20% on contractors,” or “From last year my subscription expense went from 10% to 25%” This makes it easier to cut costs and also to see where you have room to invest.
Having a bookkeeper helps your business prepare for taxes year-round
Even in quarter one, quarter two, you need to know how much you should be setting aside for taxes. Having a detailed P&L can help you see where you can change your spending to maximize whether or not you are going to have a profit or loss each year. It will also give you a clearer picture to know how much to pay yourself.
If you are ready to begin narrating your business’s money story, schedule a strategy call, and let’s discuss how to make 2021 the year you understand and fully control your business’s finances.