What is a Certified Public Accountant (CPA)?
A Certified Public Accountant, or CPA, is a financial professional with a license awarded by the American Insitute of Certified Public Accountants. As far as credentials, a CPA has a bachelor's degree in a field like accounting, finance, or business, two or more years experience in public accounting, has passed a certified accounting exam - called the Uniform CPA Exam, and must complete continuing education every year.
CPA vs Accountant: What's the Difference?
While a CPA can perform basic financial tasks that an accountant can, such as tax filing and preparing financial statements, they can also perform specialty tasks that an accountant cannot. Specifically, a CPA can:
- Prepare financial audits / reviewed financial statements
- Perform IRS representation for clients
These duties are especially important, as financial audits are required by all public companies in the United States. These reports must be filed with the US Securities and Exchange Commission (SEC), which a CPA can assist with. A CPA can also become a “stand-in” for you to the IRS, helping to explain your case and provide information in your place.
How Can a CPA Help My Business?
A CPA can offer strategic advice and assistance in many aspects of your business. A CPA can help you:
1. Choose a business structure
When starting your business, deciding on a business structure is crucial. A CPA can help guide you in the right direction and offer expert advice on making the right decision.
2. Complete and file complicated taxes
CPAs are required to take 150 hours of continuing education classes per year, which means they are current in today's tax code. Your business may be dealing with troublesome sales tax, state tax, and federal tax, which CPAs can help prepare.
3. Discover the areas your business can grow
When looking at your financial statements, CPAs can offer advice on key points where you can grow your business. Your CPA will analyze your business's cash flow, inventory, and more.
4. Conduct required IRS audits, reviews, and complitations
CPAs can conduct many different reports regarding your financial statements, some of which may be required by the IRS for your business.
5. Sell your existing business, or buy a new one
If you are going to sell your business, merge with an existing business, or acquire a new business, a CPA can give insight into value and worth to help with the process.
A CPA can be an essential partner to your business, giving suggestions for business growth and potential while staying up to date on difficult tax laws and regulations. Having a CPA in your business toolkit can allow you peace of mind with your finances and ally for your business-critical decisions.
How to Choose the Right CPA?
Finding the right CPA can be difficult. With thousands of qualified professionals near you, it can be hard to navigate how to choose the right financial expert to meet your needs. When deciding on a CPA, it is important to find someone who is familiar with your particular industry and type of business.
Tax laws and regulations are ever-changing, so it is essential to partner with a professional who is well informed about your trade. Reading customer reviews, asking about experience, and asking about accounting software are all important steps in the hiring process for a qualified CPA.
Location is also something to keep in mind, as many accountants now work remotely as well. If you've only worked with local accountants in your area, working virtually is a great new option to keep in mind.
CPAs can be dynamic and influential allies for you and your business. A qualified, experienced CPA can help advise on areas of growth for your business, assist with troublesome tax filing, save you valuable time, and save you money overall.
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