When to hire a bookkeeper or a CPA

General business guidance, not tax or legal advice. Credentialing rules, forms and deadlines change, and fees vary by market. Verify anything specific with your state board of accountancy, the IRS, or a CPA who works with contractors.

Most contractors go looking for help the same week a year of card charges turns into a filing deadline. It is the worst moment to hire. You are now shopping for cleanup on top of the work itself.

"Get an accountant" is really three jobs. Someone records what happened. Someone files the returns. Someone tells you how to structure the business. One person can do all three, but the three are priced differently and needed at different times.

Three jobs that get bundled into one word

Attorneys hold the same unlimited representation rights as EAs and CPAs.

"Bookkeeper" is not a protected title: no state licenses bookkeepers the way it licenses CPAs, and the AIPB and NACPB credentials are voluntary. That is not a reason to avoid one — a bookkeeper who knows job costing can be worth more to a contractor than a generalist CPA billing several times as much. It only means the title does no vetting for you.

The CPA route is set state by state, and the education requirement is in flux. Alongside the traditional 150 credit hours, NASBA and the AICPA added a bachelor's-plus-two-years-experience pathway that jurisdictions are enacting on their own timelines. What your state requires today is a question for its board of accountancy. Anyone paid to prepare federal returns must hold a PTIN, and the IRS directory of federal tax return preparers lets you check a name — though it lists credentialed preparers only, so an absence proves nothing.

What doing it yourself actually costs

Their hourly rate against yours is the wrong comparison, because your admin hours were never all sellable. Track them for one month, then price them twice: once as if every hour would have sold, once as if half would. The table runs the arithmetic at $85 an hour to show the shape, not to give you a rate. Put your own number in.

Then add the part with no hourly rate: the deduction missed because the receipt was gone, the estimated payment underpaid, the sales tax return filed late. Compare that total against a real quote for the work, not a figure from an article: these fees are local and range widely.

Five events that decide it for you

These are not cost-benefit calculations. Get help before, not after:

• Your first employee. Payroll is the biggest jump in complexity a small trade business makes: federal withholding and employment tax deposits, Form 941 each quarter (the IRS notifies some very small employers to file Form 944 once a year instead), Form 940 for federal unemployment, W-2s to employees and the SSA, plus separate state withholding and unemployment registrations. Late deposits carry penalties, and the IRS employment tax due dates page has the current schedules.
• An IRS or state notice you do not understand. Anything beyond a simple math correction is a reason to call an EA or CPA the same week. Notices have response windows, and a window is easier to protect than to reopen.
• Work crossing a state line. A second state can bring income tax filing, payroll registration, sales tax registration and its own contractor licensing. Ask before the first job, not at year end.
• The LLC-versus-S-corp question. Whether the election saves anything depends on your profit, the salary you would have to pay yourself, and your state's treatment of the entity — some states tax S corps in ways that eat the federal saving. It is made on Form 2553 and timed to the tax year you want it to start in. The IRS does publish late election relief procedures, but relief is conditional and not something to plan around.
• You keep missing deadlines. If the estimated payment or the sales tax return has slipped more than once, the problem is not knowledge. It is that the job is nobody's. Hiring someone fixes that; another reminder app does not.

How the money usually works

Treat this as shape, not price:

• Bookkeeping is the cheapest and most frequent, usually a flat monthly fee scaled to transaction volume and number of accounts. Payroll processing is often quoted separately, per run or per employee.
• Tax preparation is annual, usually a flat fee per return, priced by complexity — a Schedule C is not an S-corp return with a state filing attached.
• CPA advisory time is the expensive one, billed hourly, and bought in blocks rather than retained.

Get the scope in writing before you sign: what is included, what triggers extra billing, and who files what.

Finding one who has worked with contractors

Trade businesses have specifics — job costing, retainage, progress billing, materials versus labor on sales tax, equipment depreciation — that a bookkeeper used to consultants and online sellers will not recognize. Ask directly:

• How many contractors or trade businesses do you currently work with?
• Do you do job costing, or only profit-and-loss at the company level?
• Who handles my sales tax returns, you or me? (Ask this one explicitly; it falls between roles constantly.)
• What is your normal turnaround on a question during filing season?
• Which software do you work in, and do I keep access to my own file if we part ways?

That last one matters more than it sounds: the accounting file is your record, not theirs, so own the subscription yourself. Then check the license where one exists — the state board for a CPA, the IRS directory for an EA.

What you hand over sets the price

The fee tracks how much reconstruction they have to do. A separate business bank account, deposits that match an approved document, and sales tax on its own line rather than buried in a total keep the month routine.

The middle one is where quoting touches bookkeeping. When your approved estimates and their line items sit in one place, with tax broken out and the approval attached, a bookkeeper asking what a $2,400 deposit was for gets a document instead of your memory. DoneQuote keeps that trail as you send the work out.

Hire in this order

If budget forces a sequence, this one pays best:

1. A bookkeeper, monthly. It removes the most hours and produces the clean records everything else depends on.
2. A tax preparer — EA or CPA — for the annual return and your estimated payments. Cheaper and faster because step one is done.
3. CPA advisory hours, when a real decision is on the table: entity structure, a multi-state question, a big equipment purchase.

Start at step three without step one and you pay a CPA's hourly rate to sort receipts.