Your veterinary practice’s success hinges on sound financial management—something often easier said than done. Tight margins, multiple revenue streams, and ever-changing tax laws make having the right financial professionals in your corner essential. While most practice managers are familiar with certified public accountants (CPAs), fewer understand the role of enrolled agents (EAs).
The VetBooks team often partners with tax professionals, including CPAs and EAs, to provide comprehensive services for veterinary hospitals. Here’s an explanation of what an EA does and why you might consider hiring one.
What is an enrolled agent?
An enrolled agent (EA) is a federally authorized tax specialist who represents taxpayers before the IRS. Unlike most CPAs, EAs focus exclusively on taxes, learning tax laws and codes to help clients with complex situations. To earn the designation, an EA must pass a rigorous three-part IRS exam or have prior experience working for the IRS.
Krystle Conley, EA and owner of Conley Consultation, explains, “EAs focus on tax preparation and planning, IRS representation, and tax law expertise. We learn how to understand what the IRS writes so we can interpret the law even when it’s outside our area of expertise. I tell my clients, ‘I may not always know the answers, but I know how to find them.’”
EA vs CPA: What’s the difference for veterinary practices?
CPAs and EAs can each file taxes and offer some financial advice to individuals and businesses, but their focus areas differ significantly. CPAs have experience in several areas, including accounting, audits, business valuation, and taxes, and are well-equipped to provide comprehensive financial services. EAs, on the other hand, focus on tax law, tax planning, tax advisory, and tax compliance. Both professionals must pass several rigorous exams and are certified in their respective disciplines—the difference is in their scope of practice. Additionally, CPAs are state-licensed, while EAs hold a federal credential.
Conley explains that while CPAs are great with numbers and excel in accounting, EAs specialize in navigating the complexities of tax law and interpreting the constantly changing IRS rules. “People assume I must be great at math, but that’s not what makes an EA valuable,” she said. “Our strength is in understanding tax law and using the tax code strategically to help clients save money—that’s what motivates me.”
EAs are also passionate about helping. “There’s a huge misconception that everyone should know how to do taxes, but the tax code has become quite complex,” Conley added. “That’s what I’m here for. Taxes can be super stressful, and reassuring worried clients and making it painless for them brings me joy.”
How bookkeepers and tax professionals work together
Veterinary managers often hire an accounting professional, assuming one person can keep the books in order, plan for tax time, and file with the IRS. Although one person can perform these jobs, especially if they have training in multiple disciplines, this arrangement may not be ideal.
In veterinary practice, each of these roles demands a unique skill set. Bookkeepers track daily financial transactions, categorize income and expenses, and generate monthly reports using veterinary-specific tools, such as the AAHA Chart of Accounts. Tax professionals use those reports to prepare and file taxes and advise on strategies to reduce tax liability. Well-managed books are necessary for tax professionals to do their jobs.
Why veterinary experience matters
Veterinary medicine is a complex business with multiple revenue streams, and is different from a typical retail or professional services company. Financial and tax professionals with veterinary experience can provide better advice and problem-solving than those without. However, that doesn’t mean every professional you work with needs this experience. When you work with our VetBooks team, most EAs or CPAs can provide tax advisory services.
Should you hire an enrolled agent?
EAs are a good choice for businesses that need specialized tax expertise, particularly for in-depth tax analysis, planning, and IRS representation. While CPAs provide a range of financial services, including audits and compilations, EAs focus exclusively on tax matters. Hiring an EA can be a strategic way to ensure tax compliance while benefiting from their deep understanding of tax law. Some businesses may find value in working with both professionals, leveraging their complementary expertise to manage both tax and financial needs effectively.
Veterinary finances are complex, and professional partnerships can give you confidence in your future success. Whether you choose an enrolled agent, CPA, or both, working with an experienced veterinary bookkeeper from VetBooks can ensure your books are accurate and up to date. Contact us to book a meeting and learn how specialized bookkeeping services can set your tax professional and your practice up for success.
