Insight Into the Practices of Tax Preparers and Bookkeepers

Insight Into the Practices of Tax Preparers and Bookkeepers

They say teamwork makes the dream work. This is especially true in tax preparation and bookkeeping. Each year, particularly at tax time, bookkeepers and accountants must work together to meet their client’s needs. While this sounds easy enough, there are often some sticky points in this collaboration, for a variety of reasons. Getting a better understanding of what the other does makes everyone’s lives better when tax time comes around.
We chatted with two rockstar Intuit® partners, Eileen Reppenhagen and Jeff Borschowa, for their take on how both professionals should navigate this relationship. Reppenhagen is a certified QuickBooks ProAdvisor® and the creator of TaxDetective, a company that offers QuickBooks training for business owners, bookkeepers and accountants. She has more than three decades worth of bookkeeping experience under her belt and recently sold her accounting company. Borschowa was an accountant for 25 years before creating his company, Business Evolution Consulting, to help accountants and bookkeepers grow their businesses. He’s a jack of all trades, defining himself as an author, educator, business advisor and curator of accounting information. He recently wrote a book, 8 Pillars for Exponential Business Growth.

Even if it isn’t their core competency, the best bookkeepers must have a comprehensive understanding of tax, or else transactions in a company’s books could land the client in hot water with the CRA, says Reppenhagen. For example, if you’re unaware of the CRA’s rules for the disability tax credit, or what documentation is needed to claim a capital loss, clients could miss out on tax-saving opportunities.
As for tax preparers, they need to understand the client’s transactions and cash flow to properly do their taxes, says Reppenhagen. If the income flow doesn’t match the tax return, this puts the client at risk of being reassessed.

Having an understanding of one another’s work doesn’t mean taking on the other professional’s tasks, says Borschowa. “Bookkeepers are one breed of species; accountants and tax people are a second breed. I like to keep the two separate,” says Borschowa. “Bookkeepers get into a level of minutia; they’re really good at the details. Tax preparers are very into the big picture and they want the end result.” Reppenhagen adds that bookkeepers who understand taxes, and tax preparers who understand bookkeeping, are “saving their clients time, money and minimizing risk.”

For tax preparers, Borschowa suggests building a good relationship with the bookkeeper. They likely have a closer relationship with the client due to more frequent meetings. Some tactics include involving the bookkeeper in meetings or taking them out to lunch and teaching them about taxes and how you like your files formatted. Also, if the bookkeeper has made a mistake, reach out to them, chat about the issue and treat them like a team member, instead of throwing them under the bus. Once a relationship has formed, there’s a better chance they will seek your expertise in helping out the business, which means more work for you.

“We all believe that we work with numbers and we think everybody should be about the numbers, but at the end of the day, people do business with people,” says Borschowa. “It’s the little things, like sending out a thank you card if you get a new referral from somebody, that go a long way.”

For bookkeepers to grow, they should put together a sample file showcasing their documentation style since it demonstrates their professional work, he says. “Let your binder speak for itself,” says Borschowa, who also recommends printing a nice cover, adding tabs and putting it in a binder. “It’s the little things like how you present the package.” Reppenhagen has a procedure manual that she showcases, laying out exactly what she does and how she handles things for her clients. This manual is such a great asset that she’s been asked by colleagues and government workers for a copy.

Along with that, networking events are a great way to grow your business. Boroschwa suggests since there are many opportunities to connect with small businesses. If time isn’t your friend, then reach out to accountants you enjoy working with to see if they know anyone in need of bookkeeping services.
Accountants and bookkeepers must work together to survive, but they can also grow together. Don’t discount the other person’s role.

What other tips do you have to share about working with an accountant or a bookkeeper?