Bookkeeping records what happened. Accounting explains what it means. Tax preparation and planning turn it into filed returns and a lower tax bill. They build on each other in that order.
Side by side
| Bookkeeping | Accounting | Tax preparation and planning | |
|---|---|---|---|
| Core job | Record, categorize and reconcile every transaction | Turn the books into financial statements and insight | File returns and reduce tax legally |
| How often | Weekly or monthly | Monthly, quarterly and year-end | Quarterly planning, annual filing |
| Typical output | Clean general ledger, reconciled bank and card accounts | Profit and loss, balance sheet, cash flow, budgets | Business and personal returns, estimated payments, 1099s |
| Who does it | Bookkeeper | Accountant or CPA | CPA, enrolled agent or tax preparer |
| Answers | “Where did the money go?” | “How is the business doing?” | “How much do I owe, and how do I owe less?” |
What does a bookkeeper do?
- Categorizes bank, card and payment-processor transactions
- Reconciles every account to its statement each month
- Tracks bills, invoices and who owes whom
- Keeps contractor W-9s and records for 1099s
- Closes the month so the numbers are final
If this isn’t done every month, everything downstream is built on guesses.
What does an accountant do?
- Prepares monthly or quarterly financial statements
- Reviews the books for errors and unusual items
- Explains margins, cash flow and trends
- Helps with budgets, forecasts, loans and investor reporting
- Moves the books from cash to accrual basis when the business needs it
What do tax preparation and planning cover?
Preparation is filing: your business return (Form 1120-S, 1065 or 1120, or Schedule C on your 1040), your personal return, and information returns such as 1099s.
Planning happens during the year, while there’s still time to act: whether an S-corp election makes sense, how much to pay in estimated tax, when to buy equipment, and which deductions to set up. It only works if the books are current. See our 2027 tax deadline calendar for the dates that matter.
Which do you need?
| Your situation | What you need |
|---|---|
| Brand new, a few transactions a month | Year-end books and a tax return, at minimum |
| Growing, with steady monthly revenue | Monthly bookkeeping, monthly financial statements and tax filing |
| Profit above about $50,000 a year | Add year-round tax planning (an S-corp review especially) |
| Raising money, taking a loan or selling | Accrual-basis accounting and reviewed financial statements |
How AutoTaxPilot covers all three
Software sorts and matches your transactions as they arrive. A dedicated bookkeeper reviews and closes your books every month, and a CPA reviews anything with a tax impact. Plans range from year-end books to full bookkeeping, planning and tax filing. Read about what bookkeeping costs, compare our plans, or book a free 15-minute call. On a 1-year plan you get 3 months free, applied as 25% off every bill.