All businesses benefit from having the expert support of a financial and tax advisor, but ideally, they need a Certified Public Accountant (CPA), and not just an accountant or enrolled agent.
What is a Certified Public Accountant?
CPAs are professional accountants who meet state qualifications, and are licensed by the state. As part of their training and subsequent qualifications, they must keep abreast of all existing tax laws to maintain their license, and to become a CPA, they must pass the Uniform Certified Public Accountant Examination and meet other educational work requirements.
The CPA exam takes place over a number of days, and is a rigorous test of all facets of financial and tax expertise. Once they achieve their license, they must continue to comply with ongoing educational requirements.
What’s the difference between a CPA and an accountant?
One of the simplest ways to remember the differences between the two professionals, is to say that while all CPAs are accountant, not all accountants are CPAs.
Below are all tasks that CPAs are legally qualified to carry out:
- Business taxes
- Representing businesses at tax audits
- Assist with payroll and payroll taxes
- Preparing financial statements
- Analyzing financial statements
Why does your business need a CPA?
While you never know for certain whether your business will be the subject of an IRS audit, you should always expect that you might be, and as such, be prepared in case of its eventuality. In the event of an audit, your accountant (who is not a qualified CPA) may be able to represent you, but only in a very limited manner, whereas a CPA is eligible to fully represent you in front of the IRS. When hiring a professional to help you prepare your taxes, ensure that they have the relevant authority to represent you in an audit.
Finding a CPA
Ideally, when looking for professional help to take care of your accounting needs, you should find a CPA firm that includes a bookkeeper and an accountant; that way you can allocate some of the more routine responsibilities to the bookkeeper, and have the CPA take care of your tax and financial analysis. Should you prefer, you could outsource your bookkeeping needs, and then consult with a CPA as and when needed for help with your business taxes.
If you’re a busy CPA firm who has been fortunate enough to take on new clients in recent months, but are struggling to keep up with the workload as a result, why not delegate some of your more basic requirements to an outsourced accounting and bookkeeping firm? That way, you can still be a busy CPA with a large client base, but continue to give them the efficient and accurate service they’ve come to depend upon you for.