CPA vs Bookkeeper — What Each Actually Does
| Task | Bookkeeper | CPA |
|---|---|---|
| Bank and credit card reconciliation | Yes — core scope | Technically yes — but charging $150–$400/hr for it |
| Expense categorization | Yes — core scope | Yes — but expensive |
| Monthly P&L and balance sheet | Yes — core scope | Yes — review function, not preparation |
| 1099-NEC tracking | Yes — core scope | Sometimes — usually billed separately |
| Year-end CPA workpapers | Yes — Sharma Jyoti and Co includes this | Reviews workpapers prepared by bookkeeper |
| Tax return preparation and filing | No — not qualified | Yes — licensed and required |
| Tax strategy and planning | No — advisory scope | Yes — high-value CPA work |
| IRS audit representation | No | Yes — licensed to represent you |
| Business entity structuring advice | No | Yes — S-corp election timing, entity choice |
CPA vs Bookkeeper Cost Comparison
| Provider | Hourly Rate | Monthly Cost | Annual Cost |
|---|---|---|---|
| US CPA doing monthly bookkeeping | $150–$400/hr | $1,500–$6,000/mo | $18,000–$72,000/yr |
| US freelance bookkeeper | $35–$55/hr | $400–$900/mo | $4,800–$10,800/yr |
| Sharma Jyoti and Co (ICAI CA firm) | $8–$15/hr effective | $200–$600/mo | $2,400–$7,200/yr |
| US CPA for year-end filing only | $150–$400/hr | N/A — project-based | $1,500–$3,000/yr one-time |
The Two-Provider Model — The Optimal Setup
Best practice for US small business:
- Sharma Jyoti and Co: Monthly bookkeeping, 1099 tracking, quarterly estimated tax data, year-end CPA workpaper package — $200–$600/month
- Your US CPA: Reviews our workpapers, prepares and files your tax return, provides tax strategy — $1,500–$3,000/year one-time
- Total annual cost: $3,900–$10,200/year
- CPA doing everything: $18,000–$72,000/year
- Annual savings: $7,800–$61,800/year
Frequently Asked Questions
A bookkeeper records transactions, reconciles accounts, and produces monthly financials. A CPA is licensed to interpret those financials, apply tax law, and file your return. You need both: Sharma Jyoti and Co ($200–$600/month) for monthly bookkeeping, your US CPA ($1,500–$3,000/year) for tax filing.
Yes — different roles. Bookkeeper keeps the records clean monthly; CPA reviews at year-end and files your return. Clean monthly books from Sharma Jyoti and Co reduce your CPA's year-end time, which typically saves $300–$700 on their tax preparation bill on top of the monthly bookkeeping savings.
Yes but it is expensive. A CPA billing $200/hr for bank reconciliation is inefficient — they prefer tax and advisory work. Most CPAs refer out bookkeeping anyway. The optimal model: Sharma Jyoti and Co handles monthly bookkeeping at $200–$600/month, your CPA handles year-end at $1,500–$3,000/year.