CPA vs Bookkeeper: Who Should Be Doing What in Your Contracting Business?
Most contractors blur the line between bookkeeper and CPA - and end up overpaying for one while underusing the other. Here's how the Cash Flow Cowboy™ draws the line, and how to staff your finance function.
Larry M. Weinstein, CPA, CPCP
The Cash Flow Cowboy™ · 35+ years advising contractors
A bookkeeper records what happened. A CPA helps you decide what should happen next. Most contractors I meet have those two roles inverted, blended, or missing entirely - and it costs them in two ways: they overpay for high-end advice on low-end tasks, and they get no real advice on the decisions that actually move the needle.
What a bookkeeper should be doing
- Categorizing every transaction accurately, every week.
- Reconciling bank and credit-card accounts monthly without exception.
- Tracking job costs and tagging payroll, materials, and subs to the correct job code.
- Running AR aging weekly and flagging slow payers.
- Producing a clean monthly close package - P&L, balance sheet, AR, AP, job WIP - by the 10th of the following month.
What a CPA should be doing
- Reviewing the monthly close and surfacing what the numbers are actually saying.
- Quarterly tax planning - estimating, optimizing, and avoiding April surprises.
- Year-end strategy - entity structure, retirement contributions, equipment timing, S-corp planning.
- Cash flow forecasting and owner-pay strategy.
- Being the second voice in big decisions - pricing, hiring, equipment, financing.
Why mixing the roles costs you money
When a CPA gets stuck doing bookkeeping work, you pay $200 an hour for $40 work. When a bookkeeper tries to do tax strategy, you get advice that's worth what you paid for it. The Cash Flow Cowboy™ engagement model assumes both roles exist - and protects each from the other's worst impulses.
When to hire each one
Most contractors need a bookkeeper from day one. Even a fractional one - 5 to 10 hours a week - is a non-negotiable. A strategic CPA becomes worth the investment when revenue clears about $500K and the questions you're asking start having tax consequences in six figures.
The Cash Flow Cowboy's™ rule of thumb
“Hire a bookkeeper to keep the books clean. Hire a CPA to tell you what the clean books mean. Skip either one and you're flying blind in a different direction.”
If you're not sure what you have today - or what to hire next - bring it to a 30-minute Cash Flow Cowboy™ Check-Up. We'll diagnose your finance function honestly and tell you exactly what to fix first.
Next step
Want the Cash Flow Cowboy™ to look at your numbers?
Book a 30-minute Check-Up. Bring your last P&L and a cup of coffee - we'll do the rest.