Should bookkeepers provide tax preparation services?

Can a bookkeeper just stick to the books? It depends on how efficient and helpful you want to be. Here's our outline of the "outsourced accountant" model.

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So here’s a big question:

Should bookkeepers provide tax preparation services?

Do you need to do taxes as a bookkeeper or can you just stick to the bookkeeping?

Bookkeepers are often asking me whether or not they need to provide tax preparation services or if they can just be simply a bookkeeping service.

Get ready, because I’m going to make the case for why I believe the most valuable financial service a business owner can be offered is a one stop shop accountant. I call this the outsourced accounting model

The Outsourced Accounting Model

In order to become an outsourced accountant, you’ll need to perform tax returns, which, for the most part, will result in a bigger retainer.

The goal is to determine how you can be the most valuable asset to a business owner. You need to understand how you can make the most impact on their operations while working within your efficiencies, passions, and scope of work. 

If bookkeepers provide a full gamut of valuable services for a single monthly fee, they can create massive efficiencies for their clients and themselves. They can charge a much more substantial monthly retainer as well.

What services are included in the outsourced accountant model?

First off, there’s going to be two parts to this model. The first is the up front project. The second? The ongoing accounting services. 

The upfront project is usually backup bookkeeping and the creation of a tax plan. You’ll want to protect yourself a bit with an up-front project fee because you’ll see that onboarding new clients takes a lot of time and effort. Not to mention, your cleanup represents months of services that should have been performed but have not been. 

Besides that, you need to account for backup bookkeeping as well. 

Here’s the services included In the outsourced accounting model.

- Catch up bookkeeping
- Ongoing bookkeeping services
- Bookkeeping software 
- Monthly Financial reporting
- Payroll software
- Running payroll
- Creation of a tax plan
- Paying in tax estimates according to the tax plan (huge concept here)
- Business advisory services

-Personal tax return
-Business tax return
-Personal wealth coaching & guidance

These services are all predicated on a couple of meetings throughout the year, and then the accountant performing monthly bookkeeping, reporting, and updating a simple tax plan. 

I’m not just recommending that you prepare taxes: I want you to be their outsourced accountant because that’s what they deserve and that’s what allows you to provide the best service as an accountant. 

I’ve found that bookkeeping and tax prep on their own are not very valuable to business owners. Rolling the services together creates a synergy of efficiency, and it increases the quality of the advice you can provide as well.

Besides those benefits, you’ll also notice that bookkeeping is becoming a commodity. 

Bookkeeping is a Commodity

If you’re looking for an easy job, bookkeeping is probably not it.

Sure, there are promises across the Internet that you can travel the world and have tremendous freedom while you provide a bookkeeping service to businesses, but you need to remember that it is becoming a commodity.

India has highly competent accountants with some serious credentials, and they are slowly becoming the solution for business owners who are frustrated by the high price of hiring a bookkeeper in the United States.

Remember that even Quickbooks will do your bookkeeping for a couple hundred dollars a month - they'll assign one of their professionals and make it easy and painless for the business owner.

There are hordes of bookkeepers across the nation and the world eager to reconcile transactions and perform the universal language of accounting.

It's for all these reasons that bookkeeping is slowly becoming cheap and commoditized...but it is still valuable if you do it right.

There’s really a strange dynamic: on one hand it’s a commoditized service, but on the other it serves as the foundation for all great tax and accounting services that I want you to perform in this outsourced model.

For the accountant looking to provide great tax planning, give excellent guidance, and make business owners' lives easy, bookkeeping is the foundation of their accounting wisdom.

Everything is predicated on great bookkeeping.

The bottom line is that I believe there’s a strong case to be made for bookkeepers to also provide tax services. Here’s 7 specific points to highlight my opinion. 

7 Reasons Bookkeepers Should Do Tax Preparation 

1 - Tax returns are the primary reason for why you want good books

This sounds silly, but one of the main reasons why you want good books is so you can get your tax return done correctly. 

Most small businesses are at a point where their accounting is really there to account for taxes. At this point, they haven’t progressed to the point where they’re projecting their business financials or analyzing their ratios and reports.

They’ll eventually grow to this point, but many want their books done simply to tackle the tax issues. Remember, you can't force a business owner to grow into where you think they should be at with their operation. The best thing you can do is provide the service that fulfills the need they have today.

2 - Tax returns cause action

Nothing spurs business owners to action like tax deadlines. Google searches alone show how important tax season and business tax returns are. 

This is great because if you add a tax preparation service to your Google My Business page and talk about the service on your website, you will rank in the local search results for searches like “tax prep near me” and “business tax returns”. 

Even if you're not ecstatic about doing tax returns, remember that in the outsourced model, you can create a customer interested in your full offering rather than just this one thing they initially searched for.

In a way it’s like cheating. The IRS deadlines force business owners to deal with this every year, and if they don’t, they can lose everything and even end up in jail. Tax returns are the ultimate “needs based” service. Every business owner absolutely needs to deal with their annual tax returns, or they go to jail! You can bet they'll be making this search every year if they don't have it figured out just yet.

3 - Bookkeeping on its own leads to extra hassle

Hear me out on this:

If a business has a bookkeeper and a separate tax person, the business owner has to mess around coordinating between the two of you. This happened to me, and I hated it. 

Sure, paying two different fees was kind of frustrating, but the real pain is that I had to line up two sets of meetings and coordinate the back and forth between the bookkeeper and tax person.

Was it the end of the world? No! But my time is crucially important and valuable to me.

When an accountant chooses to do both taxes and bookkeeping, the business owner client doesn't have to do any messing around to coordinate the bookkeeper with the tax preparer or CPA. 

Business owners love the outsourced accountant model for this very reason.

4 - The outsourced accountant is simply valuable

This is piling on a bit, but business owners like this one stop shop model and they will pay more for it.

How do I know?  Because I grew my old accounting firm from 0 clients to 150 small businesses signed up for service.

I landed dozens of clients that connected with me initially because they thought their current accountant was too expensive.  

Then I would show how valuable we would be to them, and they’d end up signing up for $800/month, rather than the old tax person’s “too expensive” fee of $1500 total for the year.

They were paying way more with us, because they understood how valuable it would be. 

If you want to learn how to land more accounting clients, and get some of the best sales training possible in the accounting business, then check out my accounting course called “How to Start and Grow a Super Profitable Tax and Accounting Firm." 

But let me assure you, this business model is highly valued by business owners and it’s a massive market to approach.  There’s so much opportunity for this model it’s breathtaking. 

5 - It’s better than a DIY solution or typical year end tax return service

You might not want to do taxes because you don’t know how. Don’t worry about that, you can learn!

Besides that, you should remember that if you don’t do the tax return, they’re either going to do it themselves, or PROBABLY pay someone who’s not very good to do it.

You can learn to do taxes, and you’ll be great at it. 

Remember that year round advice and proactive tax planning is so crucial to a business owner that any and every solution without proactive tax planning and advisory is not just mediocre, it’s damaging and bad for the business owner. 

You should take the charge, get some training, and start preparing taxes within this outsourced accounting model. 

6 - No more anxiety at tax time is valuable

Another thing that makes the outsourced accounting model so valuable is that you’ll be able to take away one of the most stressful and problematic paradigms in business.

Business owners that don’t have a good outsourced accountant will be forced to pay tax estimates from the previous year, pay in according to their own whims, or pay in according to some estimates...

At year end the business owner is usually full of anxiety and stress because they’re waiting to find out if they owe a giant tax bill or if they’re getting money back.

It’s incredibly stressful for a business owner to sit and wait to find out their fate.

But you can make this super stressful dynamic disappear. 

Outsourced accountants, when providing proactive, year-round services, will help business owners pay in tax estimates according to a tax plan which leads to a predictable year end and a much more manageable tax return for both the business customer and the accountant. 

Remember, by doing the year round planning and bookkeeping, the tax return is much easier for you to process at the end of the year. 

Year end is easy when you’ve been proactively doing the books and accounting. 

So get excited, you can make their lives way better, and they’ll pay you to do it. 

7 - Better advice & real planning

On top of that, you’ll see that you can actually give excellent tax advice in quarter 3 and 4 to help them avoid tax bombs and make better business decisions. 

Real tax planning must be implemented before the end of the year! We all know this! Everything meaningful in the tax reduction world needs to be done in a proactive way, and your clients are missing out big time by relying on reactive, year end suggestions rather than proactive tax planning. 

To make meaningful tax reductions, a business owner will need to manage their salary and purchases during the year. If a business isn't getting year-round, proactive tax advice, they’re not really able to do any tax mitigation except for retirement plan contributions. 


So to summarize all of these. I think that you should absolutely avoid doing bookkeeping on its own and instead focus on doing this outsourced accounting model that you can get training for and purchase for only $500 at

So check out that course, and if you want to drive leads for your accounting and tax firm, then contact me at and book on my calendar for a free consultation.

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