Working with Accountants & Bookkeepers¶

You should not be doing your own taxes. You probably shouldn't be doing your own books long-term either. This guide helps you decide who to hire, when to hire them, and how to get the most out of the relationship.

Who Does What¶

The three roles are different — even though in a small practice they may overlap or be held by the same firm.

These roles can be held by the same person or by three different people. A good bookkeeper saves your CPA time (= money). A good CPA helps your financial advisor make better recommendations.

When to Hire a Bookkeeper¶

You can do your own books using software (see Bookkeeping Setup). Many DPC owners do — at least at first. But watch for these signals that it's time to outsource:

• You avoid opening your accounting software because it feels like a chore
• Transactions are uncategorized for weeks at a time
• You can't find a specific expense when the CPA asks
• You're regularly confused about whether a reconciliation is right
• You have employees, 1099 contractors, or complex revenue streams
• Your practice is making enough money that an hour of your time is worth more than an hour of a bookkeeper's

What to expect to pay¶

• Setup / onboarding (one-time): $200–$800
• Ongoing monthly (basic): $100–$400/mo
• Ongoing monthly (with payroll, complex): $400–$1,000+/mo
• Full-service firm with year-end support: $500–$1,500/mo

Prices vary by region, experience, and volume. Get quotes from at least two firms before committing.

Questions to ask a bookkeeper¶

1. Do you have experience with small medical practices?
2. Which accounting software do you work in (QuickBooks Online, Xero, Wave, FreshBooks, Zoho Books)? (Match your software or be willing to switch.)
3. How often do you reconcile? (Monthly at minimum.)
4. Do you provide monthly reports, and which ones?
5. Do you communicate via email, Slack, a shared portal?
6. Are you a 1099 contractor or a firm?
7. Do you handle 1099-NEC preparation for our contractors?
8. Do you coordinate with our CPA at year-end?
9. What happens if we have a question mid-month?
10. What's your response time to questions?

When to Hire a CPA¶

Before your first full tax year as a practice owner. Even if your practice is barely profitable, the entity and retirement plan decisions in year one can save (or cost) you tens of thousands in year two.

What to expect to pay¶

• Initial consultation: often free or $100–$300
• Entity setup advice: $200–$500 one-time
• Annual tax return preparation (business + personal): $500–$3,000, at the higher end once an S-Corp return (Form 1120-S) is involved
• Quarterly tax planning meetings: $250–$1,000 per meeting
• Ongoing advisory / retainer: $300–$2,000/mo

A CPA who specializes in medical practices or small businesses is worth substantially more than a generalist. Ask. The kit's Tax Planning Basics page carries a shorter list of what to look for.

Red flags in a CPA¶

• No experience with self-employed physicians or small medical practices
• Can't explain the S-Corp vs. LLC trade-offs in plain English
• Only available in March and April
• Doesn't ask about your retirement goals
• Quotes a suspiciously low fee (usually means volume-focused, not advisory)
• Never initiates proactive communication

Green flags in a CPA¶

• Asks about your practice structure, revenue, and goals before quoting
• Discusses quarterly estimates and tax savings strategy
• Proactively recommends retirement plan options
• Has other DPC or small medical practice clients
• Coordinates comfortably with your bookkeeper
• Available for questions year-round, not just tax season
• Reviews prior returns for missed deductions

Questions to ask a CPA¶

1. Do you have other DPC / small medical practice clients?
2. What's your position on S-Corp election for a practice at my revenue level?
3. How do you handle quarterly estimated payments — do you calculate them for me?
4. What retirement plan do you typically recommend for a physician at my stage?
5. Do you also prepare my personal tax return, or just the business?
6. How do you bill — hourly, retainer, fixed fee per return?
7. What's your response time during tax season vs. off-season?
8. Will I work with you directly or with a staff member?
9. Who signs the return?
10. Have you ever represented a client in an IRS audit?

CPA vs. Enrolled Agent vs. Tax Preparer¶

Not all tax professionals are the same. The IRS sorts them by representation rights (IRS: Understanding tax return preparer credentials and qualifications):

• CPA (Certified Public Accountant) — licensed by a state board of accountancy; broad accounting expertise; can sign audited financials; has unlimited representation rights before the IRS (audits, collections, appeals). Usually the most expensive.
• Enrolled Agent (EA) — licensed by the IRS after a three-part exam; specializes in taxation; has the same unlimited representation rights as a CPA. Often less expensive than a CPA with comparable tax expertise.
• Attorney — also has unlimited representation rights, but you would hire one for tax controversy or complex structuring, not routine returns.
• Annual Filing Season Program participant — a non-credentialed preparer who completes voluntary IRS continuing education; may represent you only on a return they prepared and signed, only before examiners and customer-service staff, and not in appeals or collections.
• PTIN holder with no credential — may prepare and sign returns but has no authority to represent you before the IRS for returns filed after 2015.

For most DPC owners, a CPA or EA is the right choice. A preparer with no credential can file a simple return, but cannot stand between you and the IRS when it matters.

How the Bookkeeper and CPA Work Together¶

In an ideal setup:

• The bookkeeper handles monthly transaction categorization and reconciliation, producing clean financial statements
• The CPA uses those clean statements to prepare tax returns, advise on strategy, and meet with you quarterly
• The two communicate directly without routing everything through you

In a minimum setup:

• You do DIY bookkeeping monthly
• You hand clean financials to a CPA at year-end for tax prep
• You meet the CPA once or twice a year

In a maximum setup:

• Full-service firm handles bookkeeping, payroll, tax prep, and advisory
• You meet monthly or quarterly with a dedicated advisor
• Everything flows through one point of contact

Most practices are somewhere between these extremes.

Red Flags in the Relationship¶

If you're already working with an accountant or bookkeeper, watch for these signs something is wrong:

• Missed deadlines (quarterlies, filings, 1099s)
• Errors in basic categorization
• Vague answers to specific questions
• You're the one catching mistakes, not them
• They don't explain what they did or why
• They're unreachable between engagements
• They resist giving you your books or data
• Surprise fees or scope creep

None of these are automatic reasons to fire someone, but they are reasons to have a direct conversation.

Getting the Most Out of the Relationship¶

Come prepared¶

Don't show up with a shoebox of receipts. Have clean books, a question list, and context for the conversation.

Ask proactive questions¶

• "What's one thing I should be doing differently?"
• "What's the biggest tax-saving opportunity I'm missing?"
• "What will year-end look like if nothing changes?"
• "Are my estimated payments on track?"
• "Is there anything I should be tracking that I'm not?"

Meet on a schedule, not just at tax time¶

Quarterly is a good default. Even a 30-minute check-in keeps you aligned and catches small issues before they're expensive.

Respect the relationship¶

Your CPA and bookkeeper are experts. Don't second-guess them based on a Reddit thread. Do ask them to explain, in plain English, anything you don't understand. That's part of what you're paying for.

Finding Candidates¶

Where to look¶

• Referrals from other DPC physicians — the single best source. Ask in DPC communities (see DPC Communities)
• Physician-focused CPAs — some firms specialize in medical practices
• Local small-business networks — chambers of commerce, SBDCs
• Professional directories — state CPA societies, the NAEA "Find a Tax Expert" directory for enrolled agents, and the IRS Directory of Federal Tax Return Preparers, which confirms a preparer's credential
• Paid referral networks (for example the Ramsey Trusted / ELP program) — the listed firms pay to be there; treat them as a starting point, not a vetting
• Online reviews for local firms — filter by business focus

Interview at least two or three¶

Even if the first one seems great. Comparison clarifies what matters to you.

Key Takeaways¶

• Bookkeeper, CPA, and financial advisor are distinct roles — one person can hold multiple, but don't skip any.
• Hire a CPA before your first full tax year as a practice owner, not in April when you realize you need one.
• A good CPA who specializes in medical practices is worth paying extra for.
• Meet on a schedule (quarterly is great). Don't reserve the relationship for tax season.
• Ask proactive questions. You're paying for advice, not just filings.

Next¶

• Understanding Business Taxes — context for your CPA conversations
• Tax Planning Basics — the Reviewed tax page with current-year limits and citations
• Bookkeeping Setup — what a bookkeeper picks up from you
• Key Business Metrics for a DPC Practice — numbers to discuss with your advisor

Read through and figures checked on 2026-09-22.