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Do I Need a Personal Accountant?

November 27, 2020 · 5 minute read

We’re here to help! First and foremost, SoFi Learn strives to be a beneficial resource to you as you navigate your financial journey. Read more We develop content that covers a variety of financial topics. Sometimes, that content may include information about products, features, or services that SoFi does not provide. We aim to break down complicated concepts, loop you in on the latest trends, and keep you up-to-date on the stuff you can use to help get your money right. Read less

Do I Need a Personal Accountant?

After years in a cubicle, you’ve jumped head-first into solopreneurship. Or you’ve finally landed your dream job—and your dream salary. Maybe you’ve decided to take up a side hustle or rent your property, or you’ve received a large inheritance.

But along with the liberation that finally comes with striking out on your own or the pride in earning more comes a larger responsibility of making sure your money is working as hard as you are.

Is it worth hiring a professional to help you with things like self-employment taxes, estate planning, and stock options, or is it better to handle them on your own?

The answer may depend on a number of factors, including your financial acumen, money-management needs, and whether you’re the hands-on (or hands-off) type.

The types of accountants are as varied as the kinds of services they offer, ranging from the neighbor who’s good with numbers to a large-firm CPA who deals with Fortune 500 clients.

Here are some ways to help find a good match for your needs.

What Type of Accountant Do I Need?

The term “accountant” is sometimes used as a catch-all phrase to refer to any professional who deals with financial transactions or taxes, but there are different types of accountants—bookkeepers, accountants, and Certified Public Accountants (CPAs)—with different skill sets and varying limits on what they can and can’t do.

A CPA earns the accounting corner office because they are certified to do everything a general accountant or bookkeeper can do, along with one important addition—government permission to file taxes on a client’s behalf and represent them in case of a tax audit.

Becoming a licensed CPA requires passing the Uniform CPA Exam and completing continuing education hours each year in order to maintain their certification. CPA fees can range anywhere from $30-$500 an hour .

An accountant without CPA certification cannot sign tax returns on behalf of a client, but they can prepare them. An accountant also can record and report detailed financial transactions and provide analysis.

Most accountants hold an undergrad degree—although it doesn’t necessarily have to be in accounting—and many pursue additional certifications such as Certified Management Accountant (CMA) and Chartered Accountant (CA) . Like CPAs, their hourly rates can vary widely depending on location and expertise, but on average charge $20 per hour .

Finally, a bookkeeper is someone who, literally speaking, can help keep your books. They’re often the ones in charge of all the money moving in and out of the business, and responsibilities can include paying bills, keeping track of account balances, recording transactions and providing reports throughout the year.

Bookkeepers aren’t required to hold an accounting degree, but some organizations and businesses do offer certification, including a Certified Public Bookkeeper (CPB) certification, which means the bookkeeper has passed an advanced skills exam and is required to take continuing education.

Bookkeepers might also handle payroll and other business taxes, although they aren’t allowed to sign tax returns or provide audit representation.

According to FinancePal, bookkeeper fees average around $18-$23 per hour depending on experience and services offered, but numbers can vary widely.

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What Financial Issues Can a Personal Accountant Handle?

Accountants can be experts in money-management topics across the board, getting the most out of taxes, and helping navigate complicated financial situations.

Beyond that, how an accountant can help depends on your individual financial needs. Here are some specifics on which type of accountant is best for specific needs.

For Independent Contractors and Solopreneurs

Finances can get complicated for independent contractors and solopreneurs, from managing invoices to tracking inventory to keeping one eye on the big business picture. For party-of-one businesses, an accountant can assist with most things money-related so that the business owner can focus on the business.

Although a non-certified accountant can’t file your taxes on your behalf, they can help you with business issues like tracking your deductions, calculating estimated tax payments, and ensuring that you reap the most benefit from your tax deductions (which include hiring an accountant). An accountant is also more likely to be on top of the latest changes in the tax law.

Another way an accountant could help independent contractors—especially right-brained creatives—is by handling all the organizational factors that come with running a business. Tasks that require a lot of left-brain activation, like invoicing, tracking sales and tracking receipts, can feel overwhelming to someone who’s never taken business classes.

For Small Businesses

For businesses with more than one employee, an accountant with small business expertise can help with everything from determining the right business structure to filing taxes.

If you’re just starting out as a small business owner, an accountant could help with the financial segments of your financial plan. During day-to-day operations, a good accountant can help with everything from opening a business bank account to payroll to just providing guidance regarding government regulations or any changes in tax law.

If you hire a CPA, they can even file business taxes on your behalf.

For Individuals

For individuals, hiring an accountant may be a harder sell. But financial management can be more difficult than you think, especially with the advent of person-to-person payment and investment apps.

If you have a good number of financial ducks, a personal accountant can help keep them all in a row.

Perhaps the biggest reason someone hires an accountant is to help them with taxes, especially if they’re facing complicated tax situations like receiving a large inheritance, giving a large financial gift, correctly filing rental property or navigating capital gains taxes.

But even for everyday life, a personal accountant can help turn your personal finance knowledge into action. It’s one thing to understand that you need to cut spending, but it’s another thing to actually put that lifestyle into practice.

The same goes for paying down debt. An accountant can help keep you on track.

Options for DIY Accounting

If going the DIY accounting route is more your style, options include researching basic and advanced concepts via online knowledge centers, enrolling in a course, or using smart, low- or no-cost money-management apps like SoFi for your checking and savings account, which lets you track your spending, create a budget and pay bills all in one place.

And while the experts at SoFi can’t give tax advice (and we recommend for any tax advice you consult a tax professional), membership does come with complimentary access to financial planners for both hands-on and hands-off help.

Interested in keeping track of your finances, all in the palm of your hand? With SoFi Checking and Savings, you can save, spend, track, and earn—all in one product, and with no account fees.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
Third Party Trademarks: Certified Financial Planner Board of Standards Inc. (CFP Board) owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design), and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.
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