Bookkeepers, CPAs, and CFOs, Oh My!

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You’re a business owner, freelancer or side-hustler. You take this stuff seriously - you’ve got a website, you’ve got business cards, you might have an assistant already. You’ve got customers and a marketing plan (though “plan” may feel like a fancy word for what you’ve got, but there you go). You’ve got clients, and you’re making money. You might even be established enough to be making good money by now.

Which means, I’m afraid, it’s time to talk about what you're doing with your money. Wait, don’t go screaming for the hills just yet!

If you’re thinking about getting some help with your money, you’re probably wondering where to start. Do you need a bookkeeper? An accountant? Both? Someone else entirely?

Your first hire: An Accountant

The very first hire you should make for your financial team is an accountant or tax preparer. This person is going to file your taxes and make sure you stay out of trouble with the IRS. They can also advise what’s deductible, what’s not, and some tips on legal structures (like sole proprietorship vs LLC vs. S-Corp) and their impact on your taxes. One type of accountant is a CPA, or Certified Public Accountant, which has more rigorous training and certifications than those without the designation.

Your 2nd hire: A Bookkeeper

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Your bookkeeper keeps detailed and regular track of your expenses, prepares documentation for your accountant at the end of the year, and prepares financial reports for you. Bookkeepers may or may not have formal training, and usually do not offer advisory services or interpretation of the numbers for you.

You might be able to stop here. If you’ve got your tax situation sorted (AKA, an accountant to handle this), and you’ve got someone helping to make sure your books are neat and tidy (AKA, your bookkeeper) - that’s enough for a lot of small business owners.

If after that, you’ve still got questions - there are a few paths you can go down.

If you want help with the day-to-day of your financial life, find a financial coach.  These folks specialize in varying aspects of helping you do things like build a budget, repair your credit, save more money, pay off debt, and feel less stress, fear, and shame about their money. The key here is to find someone who you have a good rapport with, and who you feel like you can be honest and who seems to understand your situation. Ideally, they’ll have specific experience helping people who have the issues you have get the results you’re looking for. For instance, if you’re someone who makes enough money to cover your bills but wonder all the time why you don’t have more savings, find someone who works with lots of people with that issue (I help people with this a lot - click here to talk to me about how I can help). Some folks specialize in money mindset, others in budgeting, and others in debt and credit. Find someone you like and trust and who specializes in your issues. 

If you are ready to level up your business finances, look for a CFO (Chief Financial Officer). These folks are in charge of all things financial in a business. Did you know that you can hire a part-time, virtual CFO? This person oversees all the financial operations of your business so that you can put your attention and time back into the parts of your business that need you, like serving your clients. They also can help you interpret your financial records so that you can make better financial decisions based on facts, not feelings. When I do this for my own clients, I get asked questions like “Can I hire someone?”, “Can I afford to invest in more ads this month?” or “Can I give myself a raise?”

And last, if you want to invest, see a Certified Financial Planner (CFP) or Financial Advisor. These folks are specialists in investments and estate planning. Make sure you use a fee-only fiduciary. This means that they’ve got your best interests in mind and not selling you things just to make more money for themselves. CFPs and Financial Advisors often have minimum income or wealth requirements to take on a client. Personally, I use and recommend Betterment because I like their low-cost, easy to manage investments (bonus: no minimums).

I hope that helped you navigate the waters of who could be (and who should be) on your financial team. If you’ve got questions, pop them in the comments!