Guide

Bookkeeping vs accounting: what each one is and which you need

The difference between bookkeeping and accounting, what a bookkeeper, an accountant and a CPA each do, and what a small business actually needs to buy.

Bookkeeping records what happened. Accounting interprets it and files on it. Most small businesses need all of the first and a little of the second.

Bookkeeping

Recording and categorizing transactions, reconciling to the bank, keeping documents. Historically a person at $300 to $1,500 a month. Now mostly software: this is the part AI does well because it is pattern recognition at volume.

Accounting

Preparing financial statements, tax planning and filing, advising on entity structure, handling an audit. This needs judgment and a license (CPA or EA for representation). You buy this by the hour or per return.

What to buy

Do the bookkeeping with software that works from your statements (ProfitBooks, $20 a month, billed annually, plus credits). Hire a tax preparer for the return and a CPA when you have a decision to make: S corp election, a big equipment purchase, a sale. Invite them into your books so they spend their hours on advice, not cleanup.

Your books, done tonight.

Create a free account, drop in a bank statement, and watch every transaction get categorized. 100 free credits to start, 10 more every day. No card required.

Takes about 90 seconds. No sales call, no onboarding fee, no contract.

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