Quarterbacking your bookkeeper, CPA and payroll provider

By Patrick Bonnaure, ProLedge founder.

Wouldn’t it be nice to have a one-stop-shop for all your financial needs? Bookkeeping services, taxes, payroll, etc… Some companies can provide such a bundle of services (e.g. larger CPA firms), but they either are wildly expensive or are doing a poor job on some of these dimensions. If you are a small business, you have pretty much no option other than to hire separate entities for each of the functions: a bookkeeper, a CPA (or tax adviser) and a payroll provider. It is much more cost effective and it allows you to pick the right expertise and the right fit for each function. You have to become the financial quarterback. You’re the one who has to clearly define who does what and make sure that the parties communicate well among each other.

However, this doesn’t mean that you need to become an expert on all these issues. Far from that! If you hire the proper professionals, they’ll advise you on best practices and they will know the touch-points between each other. Let’s expand on this a little bit.

At a high level, the role allocation is pretty straight forward:

  • CPA: taxes, quarterly reviews
  • Payroll provider: payroll (really?!?)
  • Bookkeeper or bookkeeping services firm: anything else related to QuickBooks

The challenge is to make sure that the information flows between these 3 parties correctly. In an ideal world, here are the dependencies:

  • The payroll provider doesn’t need anything from the other providers.
  • The bookkeeper needs the payroll information from the payroll provider to make sure that the data gets reflected correctly into QuickBooks.
  • The CPA needs the books from the bookkeeper to do reviews and file the taxes.

Unfortunately, it’s never that simple. For instance:

  • The bookkeeper may realize that, over time, your payroll liabilities are increasing whereas they should regularly come back towards zero. That’s when the bookkeeper needs to raise a flag and talk to the payroll provider to see what’s going wrong. Sometimes the payroll provider assumes that the client is paying certain taxes whereas the client is assuming that the payroll company is taking care of everything.
  • The bookkeeper may come across a situation where he/she believes that the client could take a more effective approach for tax purposes. However, bookkeepers should not provide tax advice. They should just raise flags. You should then encourage your bookkeeper to talk to the CPA and let the CPA make the recommendation.

Depending on how comfortable you are with accounting and payroll, it’s up to you to decide if you need to be the middle person for all communication between your providers or if you should let your providers talk to each other. There is no right or wrong on this. Just make sure that the information flows between them as effectively as possible.

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