Bookkeeper vs. CPA: Which Does Your Michigan Business Need?

Short version: a bookkeeper records what happened. Transactions, invoices, payroll, bank reconciliations, the routine filings. A CPA decides what it means and signs for it. Tax strategy, the income tax returns, and representation if the IRS or Michigan Treasury writes. Most growing Michigan businesses end up needing both, and since 2025 the CPA half of the job has gotten bigger here than in most states.

The difference at a glance

One title is regulated and one is not. "Bookkeeper" is a job description anyone may use. "CPA" is a license from the Michigan Board of Accountancy, and you can confirm any name on LARA's license lookup (opens in new tab). A number starting 1101 is a licensed CPA. A number starting 1103 is a registered accountant who may use the title but may not practice public accounting.

Signs you need a bookkeeper

• You do the books after hours, and they are weeks behind. A monthly bookkeeping fee costs far less than what your evenings are worth, and less than what a CPA charges to reconstruct a year in March.
• Your CPA bills you for cleanup every spring. Paying $150 to $400 an hour to sort twelve months of transactions is the most expensive way to do bookkeeping there is. Clean books are the cheapest way to lower a CPA bill.
• You cannot answer "did we make money last month?" without opening a bank app. A monthly close is the fix, and that is a bookkeeper's whole job.
• Sales tax or payroll is slipping. Michigan sales and use tax returns are due on the 20th, and every filer owes an annual return by February 28. Payroll runs every pay period, and in 24 Michigan cities it includes a city withholding. A bookkeeper keeps the routine filings routine.

Signs you need a CPA

These are the jobs that take judgment, not data entry. In Michigan three of them changed recently, which is why a business that got by with a bookkeeper and tax software in 2024 may not in 2026.

• You buy equipment, carry debt, or spend on research. Public Act 24 of 2025 decoupled Michigan from several federal provisions starting with tax year 2025. The federal return takes 100% bonus depreciation; the Michigan return allows 40% for 2025, 20% for 2026, and 0% from 2027, with an addition in the year of purchase and subtractions in later years. Treasury's own example is a $10,000 asset that produces a $5,400 Michigan addition in 2025. The business interest limit and research costs are recomputed under the rules as they stood on December 31, 2024, with a separate Michigan carryover. That is a second set of figures for every asset, for the life of the asset, and the software does not fill it in on its own.
• You own a partnership or S corporation. The flow-through entity election lets the business pay Michigan tax at 4.25% and hand members a refundable credit. It is binding for three tax years, the election is made by payment by the last day of the ninth month after year end (September 30 for a calendar year), and the annual return is due March 31. Whether it still pays changed in 2025 when the federal deduction for state taxes moved, so the math is worth re-running rather than assuming. That is a decision, and decisions are what you pay a CPA for.
• You sell across state lines, or into Michigan from outside it. Sales tax is a flat 6% with no local add-on, so the filing is easy. The setup is not. A remote seller has Michigan nexus after more than $100,000 in sales or 200 or more transactions with Michigan customers in the previous calendar year, and whether each thing you sell is taxable is a question a bookkeeper should not be answering alone. Have a CPA set it up; let the bookkeeper file it.
• You have employees who live or work in a city with an income tax. There are 24 of them. Detroit withholds at 2.4% for residents and 1.2% for nonresidents; Grand Rapids and Saginaw at 1.5% and 0.75%; most of the rest at 1.0% and 0.5%. Which employees are subject, at which rate, and which city administers it is the CPA's call. Running it every pay period is the bookkeeper's.
• Your entity is, or might become, a C corporation. Michigan's corporate income tax is 6%, with no return required under $350,000 in gross receipts. Whether to be taxed as a corporation at all is an entity decision with federal and state sides that no longer line up. Ask before you file the paperwork, not after.
• A letter from the IRS or Michigan Treasury showed up. A CPA can represent you directly. A bookkeeper cannot.

The handoff: who does what in a Michigan business

The clean way to think about it is setup versus routine. The CPA decides: entity type, whether to elect the flow-through tax, whether you owe sales tax and on what, which employees get city withholding, and what the Michigan depreciation schedule looks like next to the federal one. The bookkeeper then runs it: the monthly close, payroll with the right withholdings, the sales tax return by the 20th, the annual sales tax return by February 28, and books clean enough that the CPA's year-end work is review, not reconstruction. When the two disagree about who owns a task, it almost always belongs to whoever has to sign for it.

The setup that works for most Michigan small businesses

Start with a bookkeeper, or a CPA firm's bookkeeping package, the month the books start eating your evenings. Add a CPA for a planning conversation before your first year ends: entity choice, estimated payments, whether the flow-through election is worth a three-year commitment, and what to track so the Michigan adjustments are easy later. From there the rhythm is monthly closed books, a quarterly CPA check-in, and annual returns filed by someone who has seen your numbers all year. Many Michigan CPA firms bundle exactly this. The bundle costs more than a standalone bookkeeper, but the person closing your books is the person signing your return, and in a state where the federal and state returns now disagree, that continuity is worth something. For what the CPA side costs, see what a CPA costs in Michigan.

Frequently asked questions