coworkers argue

What's Between Bookkeeping Professionals and CPAs?

Apr 26th 2018
Share this content

Now that we are through tax season, I have some thoughts about bookkeeper interactions with their client’s CPAs/tax preparers.

This alliance is a natural partnership, as we work for the same client and have interconnected roles. However, I find myself wishing that more CPAs worked in collaboration with their client’s bookkeepers.

I often run across CPA firms who just want to burn and churn a tax return, and are unresponsive to bookkeeper’s questions. I can only assume the reason is to keep costs down, but in my opinion, this does not best serve their client’s needs.

What Kinds of Questions Do Bookkeepers Have for CPAs? 

Here are some typical interactions I may have with a CPA/CPA firm/tax preparer, and some of the less than stellar responses I have encountered:

1. Are the books Cash or Accrual?

When I ask my clients, they often don’t know, and they don’t provide me copies of their tax returns. So I have to ask the CPA.

The answer to this question is particularly important if I have inherited a QuickBooks (QB) file for which cleanup needs to be done to the Accounts Payable and/or Accounts Receivable reports.

If I need to clear out years-old uncollectible invoices, the method I use will differ if the books are Cash vs. Accrual, as Cash books cannot have Bad Debt Expense, while Accrual books can. For one client’s file, they have invoices with small open balances, many of which are over five years old.

First of all, I’m amazed that the CPA firm has never cleared out these balances, particularly in light of the fact that the firm’s own bookkeeper was doing the books until I stepped in. Many of these invoices include sales tax collected, which in California is paid on the Accrual Basis.

In order for each invoice to be eligible for a partial sales tax refund, the invoices will have to be reviewed individually to see if the balance due is for non-taxable labor, or for taxable parts. I emailed the CPA three times over the past year to inquire how he wants to address this cleanup, but he never responds. He just can’t be bothered.

I find this frustrating and unproductive. This leads me to believe the books are Cash Basis, which is why he doesn’t care about open A/R, but I’d like the client to have a clean A/R report with real current balances, not one showing five year-old invoices with balances the business owner has to ignore.

2. What is the capitalization threshold?

I’d like to know if the CPA wants me to expense that new piece of equipment, or add it to the Balance Sheet as a fixed asset. Some CPAs want all purchases posted to the P&L, and they’ll decide what to move to the Balance Sheet at tax prep time.

That being said, some CPAs just want Excel reports from the bookkeeper and not access to the actual data file, so they never look at the expense detail. In those cases, how would they know that an $800 piece of equipment is ‘hidden’ in Office Expense?

If I don’t post the expense to the Balance Sheet, the CPA won’t know there is a decision to be made. For these CPAs, I go the extra mile of exporting the Office Expense Detail Report to Excel, so they can eyeball the individual purchases. Best Practice is for the CPA to just inform me, “expense any purchase under $xxx” and then this exercise is eliminated. 

3. How to handle erroneous prior period expenses?

Again, when I take on a new client, I often find the old bookkeeper just skipped transactions during the bank reconciliation which weren’t on the statement, and left them in the Checking or Credit Card register.

For example, this month I reviewed a file for which sales tax had two payments per month for four months in 2017. The prior bookkeeper cleared one check/payment each month, but left the duplicate checks and never voided or reversed them during the account reconciliation process.

The books were closed and the tax return prepared, but the Balance Sheet is inaccurate for the Business Checking account (balance understated by the amount of four erroneous/duplicate checks which were never deleted or voided) and for Sales Tax Payable (balance understated due to four duplicate payments).

Now I will initiate a discussion regarding how the CPA wants to get rid of the duplicates in this calendar year. Note: This is another instance where the CPA never looked at the QB file for tax prep; he relied upon exported reports.

4. Year-end adjusting entries

I’d like to make the books match the tax return as much as possible. Many CPAs work their magic on the tax return, but neglect to inform the bookkeeper of AJEs to add to the books to make them match the tax return.

I find that many CPAs don’t want to spend the time to send over AJEs for Cash Basis books and that most tax returns on the Cash Basis don’t have a Balance Sheet. In my mind, though, that does not mean the books should carry forward with an inaccurate Balance Sheet. So, I constantly have to pester many CPAs to send me adjusting entries, which they don’t like to seem to spend time doing.


While many CPAs play well in the sandbox with the bookkeepers who prepare the data from which they are creating a tax return, some CPAs are unresponsive to the bookkeeping collaborator’s questions and concerns.

In the best of all possible worlds, the tax preparer and bookkeeper will work as a team to provide a clean set of financials to their shared client. Those are the CPAs with whom I prefer to work! 

We would love to hear your thoughts on this issue.

Replies (6)

Please login or register to join the discussion.

By [email protected]
Apr 26th 2018 21:02 EDT

Jody, you have illuminated an issue I am facing on an increasing level as my clientele grows. For business management and analysis, the books must be accurate, regardless of whether it impacts the cash reporting for tax filing. Thank you for the article.

Thanks (2)
By Saurabhcloud64
Apr 27th 2018 03:33 EDT

All the points mentioned in this article are very good. You have highlighted some of the major issues between bookkeepers and cpas

Thanks (2)
By JanetWaston
Apr 28th 2018 02:29 EDT

This is one awesome blog article. Really thank you! Looking forward to reading more.

Thanks (1)
By Lawrence Fox
Apr 30th 2018 14:17 EDT

As a CPA who loves bookeeping (and who doesn't do tax stuffs) I kept nodding my head all the way through this one--having run into nearly every one of those situations (or similar ones) with some of my clients' CPAs.

Of course, the major cause is that most CPAs loathe bookkeeping and aren't really interested in our "practical, tactical, day-to-day issues" that we need answered, nor are they trained to collaborate on them.


Thanks (2)
By susanashe
Jun 20th 2018 10:56 EDT

I'd just add for the CPA to work directly with the bookkeeper/accountant that handles the financials all year. I have two CPA's that have never in 4 and 6 years (2 different clients) replied to any emails or returned any phone calls to me. They waste my time and my clients time by asking the client questions and of course using "accountant's speak" which just confuses the client who then have to ask me anyway.

Thanks (0)
By orange
Aug 23rd 2018 10:29 EDT

Great article. So true!
Unfortunately, there is a value in spending time meeting with these people, face-to-face. Going out of your way to build a relationship with these CPA(S) and their various representatives helps a lot. Calling them and emails mean little to people who are against time lines and performance deadlines.
In the CPA world - from my experience with CPA's - it is a flurry of churn and burn employees who are newer, and the older ones don't waste time with 'relationships' they can put off - they do not see a benefit to it in their daily performance measurements.

I have worked along side a few CPAs who are greatly happy to working with bookkeepers, and they answer my calls, emails and texts. But there are rules there - I need to be concise and I need to give them numeric points outlined in those emails. For the younger CPAs, I can only ask ONE question per email. They are easily overwhelmed.

Thanks (1)