What should a bookkeeper send the CPA at year-end?

A closed, fully reconciled year: final trial balance, general ledger detail, balance-sheet account reconciliations tying every balance to a statement or schedule, loan statements showing year-end principal, a fixed-asset purchase list with dates and amounts, payroll annual reports, and a short memo of unusual items and open questions. The test: the CPA should not need to ask for anything routine.

How do the CPA's adjusting entries get back into the bookkeeping file?

The CPA sends adjusting journal entries after preparing the return; the bookkeeper posts them dated the last day of the closed year, so the books' retained earnings and asset balances match the filed return. Post them as delivered, ask about anything unclear, and never absorb them into current-year activity — that breaks the tie between books and return.

Can a bookkeeper give tax advice?

No — and doing so creates liability without authority. A bookkeeper can and should spot tax-relevant facts: a large equipment purchase, a possible research-credit fact pattern, a new state with payroll. The right move is to flag the fact to the CPA in writing, mid-year, and let the CPA advise. Spotting opportunities is valuable; prescribing treatment is out of scope.

When should a bookkeeper contact the CPA mid-year instead of waiting for year-end?

Whenever a fact arises that the CPA could act on before December 31 but not after: major asset purchases, entity or ownership changes, crossing into a new state, large one-time gains or losses, starting significant product development, or cash-basis versus accrual questions. Tax planning happens during the year; January is for compliance. A two-line email in June routinely saves real money.

Working with the tax accountant: the bookkeeper–CPA relationship

Every set of small-business books has two customers: the owner, who needs to run the business from them, and the tax accountant, who files from them. The relationship between the bookkeeper and the CPA is therefore not optional courtesy — it is the second half of the product. The division of labor is clean when stated plainly: the bookkeeper owns the accuracy and completeness of the record; the CPA owns the tax positions taken on top of it. Trouble comes almost entirely from blurring that line in one of two directions — bookkeepers improvising tax treatment, or CPAs receiving books so unreliable they must rebuild them at tax-season rates.

This guide covers the working relationship in four parts: who owns what, the year-end handoff package, how adjusting entries flow back, and the mid-year escalations that make a bookkeeper genuinely valuable.

Who owns what

Responsibility	Bookkeeper	CPA
Daily transaction recording and categorization	Owns	—
Monthly reconciliations and financial statements	Owns	—
Payroll postings and liability accounts	Owns	Reviews at year-end
Fixed-asset additions recorded at cost with dates	Owns the record	Owns depreciation method and elections
Depreciation and amortization entries	Posts CPA-provided entries	Computes
Tax elections, accounting-method positions	—	Owns
Return preparation and filing	—	Owns
Books-to-return tie-out after filing	Owns	Provides adjusting entries

Two rows deserve emphasis. Fixed assets: the bookkeeper records the purchase — full cost, in-service date, description — but the CPA decides recovery period, bonus depreciation, and any Section 179 election on Form 4562. The mechanics of why that decision is genuinely the CPA's call are laid out in depreciation basics. And payroll: the bookkeeper maintains the liability accounts, but the CPA will tie annual payroll reports to wage expense at year-end, so those accounts must reconcile quarterly, not just in December.

Speaking their language

CPAs extend trust quickly to bookkeepers who use the vocabulary precisely, because precise vocabulary predicts precise books.

Basis. "Cash basis" recognizes income when received and expenses when paid; "accrual basis" recognizes them when earned and incurred. Know which basis the books are kept on and which basis the return is filed on — they often differ, and the CPA bridges them. Never flip a file's basis without asking; accounting methods have tax consequences, changing one can require Form 3115, and the ground rules live in Publication 538.

Accruals and deferrals. Revenue earned but not billed; expenses incurred but not paid; cash received for work not yet done. If you keep accrual books, show the entries cleanly rather than describing them:

Journal entry — Accruing December wages paid in January

Account	Debit	Credit
Wages expense	4,300
Accrued wages payable		4,300

Dated December 31; reversed January 1 so the January payroll posting does not double-count.

Trial balance, retained earnings, distributions versus expenses. A CPA who hears an owner's draw called an expense stops trusting the file. Equity activity belongs in equity.

The year-end handoff package

The package's standard is simple: the CPA should be able to prepare the return without asking for anything routine. Build it in this order:

Reconcile every balance-sheet account through December 31 — bank, cards, loans, payroll liabilities, everything. The baseline reconciliation discipline you establish at onboarding pays off here.
Close the year and lock the period, so nothing moves after the CPA starts.
Export the final trial balance and full general ledger detail.
Attach support for every balance-sheet line: year-end bank and card statements, loan statements showing principal balance, a schedule of accrued liabilities, an accounts-receivable and accounts-payable aging if on accrual.
Build the fixed-asset list: every purchase over the client's capitalization threshold, with date placed in service, cost, and description.
Include payroll annual filings (W-2 totals, quarterly Form 941 figures) so wage expense ties out, and the 1099 information — noting that the information-reporting threshold was $600 through 2025 and rose to $2,000 for payments beginning in calendar 2026 under OBBBA (indexed after).
Write the memo: unusual transactions, judgment calls you made, questions you could not resolve, and anything the owner told you verbally that affects the numbers.

The handoff package at a glance:

Step	What you deliver	What proves it's done
1	Reconciled balance sheet	Reconciliation reports, zero unexplained differences
2	Locked prior year	Close date set in the ledger file
3	Trial balance + GL detail	Exported files dated after the lock
4	Balance-sheet support	One document per balance-sheet line
5	Fixed-asset additions list	Dates, costs, in-service status
6	Payroll and 1099 data	Annual reports tie to wage expense
7	Open-items memo	Written, dated, sent with the package

How adjusting entries flow back

After preparing the return, the CPA sends adjusting journal entries — depreciation, accrual-to-cash bridges, reclassifications, sometimes corrections. The protocol:

Post them exactly as delivered, dated the final day of the closed year.
Verify the post-adjustment trial balance matches the CPA's; retained earnings must tie to the return.
Ask about anything you do not understand — the answers are free training.
Re-lock the year.
Fix the cause, not just the symptom: if the CPA reclassified the same expense category two years running, change your coding rule now.

When to escalate mid-year

This is where a bookkeeper stops being a cost and starts being the client's first line of tax-opportunity spotting — without ever giving tax advice. The move is always the same: state the fact, in writing, to the CPA, copying the client. Facts that warrant it:

Large asset purchases, planned or completed. Timing and elections can change the answer materially — acquisition dates matter to bonus depreciation, and the CPA needs to know before year-end, not after. Background at depreciation basics.
Product or software development spending. If the client has started paying developers or engineers, the fact pattern may support the research credit under Section 41 — see what the R&D tax credit is. Flag the spending; whether it qualifies is squarely the CPA's analysis.
Crossing into a new state — an employee, an office, meaningful sales. Nexus questions age badly.
Entity or ownership changes, large one-time gains or losses, insurance proceeds, forgiven debt.
Cash-flow distress before payroll tax deposits. Escalate immediately; trust-fund liabilities are the one place a bookkeeper should be loud (deposit mechanics at EFTPS).

A workable template: "Flagging for you: client signed a $140,000 equipment order, expected in service in November. No action needed from me — wanted it on your radar before year-end." Two sentences, dated, defensible. It is also exactly the documentation habit that protects you, per bookkeeper liability basics.

When the relationship is the problem

Sometimes the friction is structural, and neutrality requires saying so. A CPA who never returns adjusting entries leaves you maintaining books that cannot tie to any return — ask once in writing, then note the gap in your file. A CPA who wants you to post entries you believe misstate the books deserves a written question, not silent compliance. And a client who plays bookkeeper and CPA against each other ("the CPA said this was fine") is a screening problem, not a communication problem — see client red flags. The relationship works when both sides want the same thing: a record that is true, and a return that follows from it.