Bookkeeping and bill-paying services may sound basic, but they can be invaluable to certain older clients.  Some people have difficulty keeping up with their checkbooks and paying bills, which can lead to fees and penalties if not paid on time.  Plus, it can open someone to fraud or identity theft.  In addition, if the finances are in disarray, families or friends may have difficulty understanding the person’s income and expenses.  Hiring or subcontracting a dedicated bookkeeper for a senior may provide peace of mind because you know someone is handling their books and payments.  Plus, they can oversee any potential fraud or financial abuse.

How is a bookkeeper different than a CPA?

Bookkeepers and CPAs have similar skills and attributes, such as being detail-oriented and enjoying problem-solving, math, and computers. The biggest difference is that bookkeepers focus on day-to-day financial transactions, while CPAs focus more on the big picture.  CPAs possess sharp logic skills and big-picture problem-solving abilities, which help them with tax return preparations, routine financial statement reviews, and performing account analysis. The day to day versus the big picture skills complement each other, so the two often work side by side.

Bookkeepers are an entry-level accounting position.  They are not required to hold a college degree.  Therefore, most have a high school diploma, receive on-the-job training, or hold a certificate or associate degree in accounting or business.  Meanwhile, CPAs hold a bachelor’s degree in accounting and acquire their CPA certification; some also have a master’s degree.  Since education and work are different, bookkeepers are less expensive than CPAs.

When should someone consider hiring a bookkeeper for a senior?

If you notice that a person needs help understanding or coping with money management, look into hiring a bookkeeper. There may be many signs, such as the person keeps paying bills late and racking up penalties and fees.  Unexplained charges they complain about.  Crumpled pieces of paper with financial information they are confused about. They do not have a bill-paying or tax-filing system in place.  Their CPA or tax specialists are constantly asking for information.  These are all signs that a person may need help, which a bookkeeper can provide. Remember that a bookkeeper differs from a Power of Attorney (POA) or Fiduciary since the person still has control of their financial situation.

What can a bookkeeper do for a senior? 

• Handle daily money management by paying a person’s bills and overseeing their expenses.
• Tax preparation – understanding and gathering the necessary tax documents on a timely basis and providing the information to the person’s CPA or tax specialist
• Make sure the person has all of their insurance policies in place and up-to-date
• Healthcare—While a bookkeeper does not make medical decisions, they will oversee medical payments. They will review the Explanation of Benefits (EOBs) and ensure deductibles and co-insurance payments are made.

How expensive is a bookkeeper?

The costs of a bookkeeper can range from an hourly rate of $40 to $100 per hour with the average being $60 per hour to a few hundred dollars a month.  The price will depend on the senior’s needs and the complexity of their financial situation.

If you notice a person is having difficulties handling their finances but does not want to relinquish their rights, consider talking to them about hiring a bookkeeper.

STAGES is here to demystify the world of senior services. Through our various articles, we provide a compass in the journey of aging.