Using a Same-Company CPA and Bookkeeper vs. Independent from each other CPA and Book

Tax, SDIRAs & Cost Segregation
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Using a Same-Company CPA and Bookkeeper vs. Independent from each other CPA and Book

Bobby Nilsen
Rental Property Investor · Los Gatos, CA · Member since 2017 · 124 posts · 131 votes

I was having a conversation about CPAs and bookkeepers and wanted to get your opinions on the pros and cons of using a CPA and bookkeeper who are the same person or part of the same company, versus a completely different CPA and bookkeeper who are not know to each other?

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Michael PlaksPro Member
Tax Accountant / Enrolled Agent · Houston, TX · Member since 2014 · 5k+ posts · 6k+ votes
3y

@Bobby Nilsen

You prompted me to write a very long post answering your question for everyone who asks:

https://www.biggerpockets.com/...

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  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    3y

    @Bobby Nilsen

    Recommend using all In one - last few years did it separately and it’s been a disaster but of course that because of my bookkeeper

    7e investments53 Reviews
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  • Joseph PalmieroBusiness Member
    CPA · PA · Member since 2023 · 151 posts · 115 votes
    3y

    It depends.  You have a higher probability of achieving the best results by going with an all in one that is niched in real estate.

    [email protected]814-720-2493
    Palmiero CPA, LLC51 Review
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  • David M.
    Morris County, NJ · Member since 2020 · 5k+ posts · 2k+ votes
    3y

    @Bobby Nilsen

    I'm sure it would hep with synergy to use the same.  But, might be cheaper to separate the functions.  Also, you'd probably have to coordinate the data formats a bit to make it seamless.

    0Reply
  • Michael PlaksPro Member
    Tax Accountant / Enrolled Agent · Houston, TX · Member since 2014 · 5k+ posts · 6k+ votes
    3y

    @Bobby Nilsen

    You prompted me to write a very long post answering your question for everyone who asks:

    https://www.biggerpockets.com/...

    3Reply
  • Cliff BennerBusiness Member
    Accountant · Denver, CO · Member since 2020 · 394 posts · 183 votes
    3y

    I recommend using separate people if able, it could be in the same firm but as someone who worked in Public Accounting doing Financial Reporting then moving it to the Tax department. Tax focused on tax items and didn't understand what goes into the Financials/Bookkeeping, and I focused on Bookkeeping. This allowed us to question each other's knowledge and drill down into items that seemed wrong to make sure the client was getting the correct work from us. 

    For my Bookkeeping business, Benner Stride, I don't touch Tax items. I do my best to keep updated on Tax related items; meals, allowable deductions, depreciation, etc to add value and insight. But I get paid to provide you with the best Accounting skills that I offer for you Bookkeeping. Plus I am independent of Tax Accountants, so to me that means I need to question my client's Tax Accountant to make sure my client gets the Value they deserve. For instance, I had a client that Return did 50 % Meals deduction even though it was 100% allowable for that year. They asked their tax accountant to correct it and were better off because of it. 

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  • Basit SiddiqiBusiness Member
    Accountant · New York, NY · Member since 2015 · 8k+ posts · 3k+ votes
    3y

    If you decide to use a separate company, I would suggest that you have your CPA review the books after 1-2 months.

    It is better to make sure the books after being done correctly from the start.
    If he doesn't review it until after 12 months, and there are issues, it will likely need to be redone or take more time to have the issues fixed.

    Best of luck

    [email protected]917-280-8544
    Basit Siddiqi CPA4.979 Reviews
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  • Max Emory
    Accountant · 100% Remote · Member since 2019 · 497 posts · 216 votes
    2y

    Hey @Bobby Nilsen, Happy New Year!

    I'd say this depends on the quality of the bookkeeper and the tax professional.

    A lot of REIs come to our bookkeeping firm from an all-in-one bookkeeping/tax solution and they had a poor experience with it. From what I've personally seen, this is usually due to the tax firm not managing their staff appropriately and being overwhelmed with too much business. When this happens, your account falls through the cracks and the bookkeeping portion of your account is the first thing to fall through that crack.

    I've seen this so much now I actually recommend people separate their bookkeeping provider from their tax filing/strategy provider. I think it's one of those things that sounds great on paper but companies have a hard time executing for some reason.

    Now, if your bookkeeping provider and tax filing/strategy provider are separate, you need to ensure they communicate at least once per quarter to ensure there won't be any issues come tax time. It all boils down to communication.

    Hope this helps!

    1Reply
  • Jake BakerBusiness Member
    Flipper/Rehabber · San Diego, CA · Member since 2020 · 1k+ posts · 695 votes
    2y

    @Michael Plaks That is a great post you made explaining the difference between the two. 

    @Bobby Nilsen If you hire a bookkeeper that is separate from your CPA, I recommend that you find one that specializes in real estate. 

    [email protected]
    BookkeepingRE - Bookkeeping for Real Estate & Service-Based Businesses58 Reviews
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  • Ahad AliPro Member
    CPA/Investor · Bronx, NY · Member since 2018 · 236 posts · 45 votes
    2y
    Quote from @Bobby Nilsen:

    I was having a conversation about CPAs and bookkeepers and wanted to get your opinions on the pros and cons of using a CPA and bookkeeper who are the same person or part of the same company, versus a completely different CPA and bookkeeper who are not know to each other?

    Having a CPA and bookkeeper as the same person or part of same company makes things simpler because if the bookkeeper runs into any questions or issues, he/she can consult with the CPA and tackle the issue. The communication is more streamlined and keeps the process simpler. Having a CPA and different bookkeeper who are not known to each may lead to miscommunication of information and can create problems for the taxpayer.

    Feel free to connect with us we have clients throughout all 50 states! 
    0Reply
  • Markus Shobe
    Accountant · Indianapolis, IN · Member since 2019 · 247 posts · 134 votes
    2y

    Usually if you are going to have CPA do your bookkeeping it is going to cost more money but it can work. In my opinion I think it is best to separate the two as you have two different people looking at the books. I have caught CPA errors before and they have caught mine. 

    2Reply
  • Kelly O'Keefe
    Accountant · NC · Member since 2023 · 123 posts · 163 votes
    2y

    I think it depends on the situation. I hate saying that as an answer but in some cases it is true. 

    If you have a CPA that is willing to do you bookkeeping at a low cost I would jump on that. I would keep a closer eye on a CPA acting as a bookkeeper as if you make a mistake once there is not an extra set of eyes to catch the mistake. However, if you know the books then the final product should be a breeze. 

    I have also seen teams of CPAs/bookkeepers that work well together and manage the books seamlessly. I think all options can work as long as you do your due diligence and have a clear objective when interviewing. 

    0Reply
  • Nate MeekerBusiness Member
    Real Estate CPA | California · Member since 2020 · 544 posts · 251 votes
    2y

    @Bobby Nilsen - Most CPAs over charge for their bookkeeping. Divide and conquer, but make sure there is open communication between the two. That is where you will get the best service and the best price. I personally recommend @Jake Baker. 

    The CPA Realtor 570 Reviews
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