Bookkeeping is bookkeeping, right?

Bookkeeping is bookkeeping, right?

Hell. No.

People ask me pretty regularly why they shouldn't just get the bookkeeping their CPA offers them. It makes sense, sure. Get everything under one roof, right?

Here's the problem: Your CPA is probably a CPA so they can do taxes. What that often translates to is bookkeeping that happens for a singular purpose - making that CPA's job easier during tax season.

Do the special rules for tax depreciation have a meaningful impact on your business? Nope. So why do they end up on your books so often?

Do the meals that you buy for your team count for tax deductions? Pretty rarely. But you still consider those business expenses, don't you?

Does the IRS care whether 80% of your income comes from only 1 or 2 clients? Not a chance. But if that one client bails, how likely will you be to survive?

And there are thousands of other reasons why tax-focused bookkeeping is just another Expense to you rather than being an investment in your business or a useful tool.

Bookkeepers who specialize in operations, on the other hand - the day to day activity of your business - can provide huge benefits to you. They're not likely to (directly) save you a ton on taxes, but oh boy will they boost your profits if you have a good one.

What can a great operations-focused bookkeeper do that a tax-focused bookkeeper won't?

 - Help you understand which products, services, projects, etc are making you money and which hurt you.

 - Show you how much of your cash is going toward actually improving your revenue.

 - Organize your numbers in ways that will help you make better decisions about where you can do better and how.

 - Pay. Yourself. More.

So be careful when you get serious about contracting someone to do your books for you. Know your goals. Know whether the person or company that you're talking to will help you reach them or just take your money to make your tax preparer's job easier in Spring.

You can probably guess at this point what our focus is at Compass Rose :P

Reach out if you're ready for help.