Accounting may be critical to a business. But, do you need to enlist the services of a CPA (certified public accountant) for your business? Why are some small businesses able to make do with having just a bookkeeper or a regular accountant?
Generally, a bookkeeper should be enough to get a new business’ financial data in order. In fact, with a little background in accounting or bookkeeping, an owner might even be able to manage early-phase financial tasks without too much trouble.
However, there comes a point in your business’ growth when a “little background” or “lack of experience” will no longer cut it. That means your company will require more than an individual who completed a short course in bookkeeping or an accounting graduate.
That is when a CPA’s role comes into play. But what exactly does a CPA do?
Being an accountant is one thing, but being designated as a CPA is a whole other level entirely. The road to becoming a CPA requires you to brave through the countless requirements and exams of an accountancy course. However, a huge chasm lies between the job of an accountant and a CPA.
On the surface, an accountant and a CPA aren’t that different. They both keep the books, plan the finances, and generate financial statements for the businesses they work for. The gap between these two professions exists in meeting the requirements set by the state in terms of experience and education.
A CPA is a title an accountant receives once they pass the national standard exam. Whereas a regular accountant is simply one who has his or her bachelor’s degree in accountancy.
Primarily businesses hire CPAs for their unrivaled ability to prepare and file a company’s tax returns. However, they are also good for many more tasks beyond this, namely:
Having a CPA on board means tax problems or audits no longer have to keep you up at night. A certified public accountant can handle these issues in front of the IRS with relative ease. They can also come up with the answers to any of the questions the local or state board might have for your business. Check out tax preparation services, Chicago for more information.
Part of their forte is providing tax advice. This addresses your business specifically, thereby allowing you to minimize tax burdens throughout the business period. That alone should significantly reduce the chances of an audit.
No, we’re not talking about an IRS audit; a CPA audit is completely different. In fact, the reason a CPA audit may be required is to prevent any form of inquisition by the worst possible agency (yes, we’re talking about the IRS). Reports by CPAs offer an unbiased view of all your company’s financial dealings. Additionally they check that everything is up to the standard.
CPAs seek to assure you that all the information gathered is relevant and faithfully represented. Therefore allowing you to use such data to make big business decisions.
We don’t often consider day-to-day financial matters as something to involve CPAs in, but they can assist in these areas considerably, too. They provide strategic and long-term planning for things like risk management coordination and insurance. And, will also handle preparation of financial statements for stockholders, cash management, budgeting, and estate planning.
If someone’s been embezzling money from your company, it’s a forensic accountant’s job to discover how they’re pulling it off so you can find out the culprit’s identity. Also called fraud accounting, forensic accounting involves your CPA going through the books to find any criminal conduct evidence.
If you suspect someone from the company’s higher ranks is ripping you off, or money is disappearing, a CPA should help you get to the bottom of the situation.
As we touched on earlier, CPAs can do everything regular accountants and bookkeepers can. In addition to the basic roles a CPA has at a company, they can also work as:
If you’re looking to partner with a CPA, make sure he or she meets your personality, cost, and service requirements. It’s one thing to understand what a CPA is and what it entails, but it’s another to know if the person holding the title will be capable of forming a mutually beneficial relationship with you.