Does my small business really need CPA services?

cpa hard at work

What is a CPA?

CPA is the abbreviation for a certified public accountant, a profession recognition that is licensed by the professional organization, American Institute of Certified Public Accountants. Persons that are awarded a CPA have passed the stringent Uniform CPA Examination after completed the education requirements and a level of work experience. That work experience is typically gained after employment of working with a CPA for small business taxes or other areas of business finance areas. Without the completed education along with work experience with a local CPA for small businesses, the official licensing cannot be attained.

These requirements established by AICPA gives the organization the ability to enforce and maintain professional standards within the accounting industry. A CPA becomes a trusted CPA small business services and a tax advisor for individuals. Once a person has been licensed by AICPA, they may hold the position of, or provide the services of these positions:

  • Accounting consultants
  • Auditors
  • Business advisers
  • Decision makers
  • Tax consultants
  • And more that coincides with the duties of a CPA for small business taxes and other financial matters. 

An accountant and a CPA have many of the same duties, but there are four major differences: 

  1. Professional Licensing: As we stated earlier, a CPA has completed educational requirements and passed the exam issued by the American Institute of Certified Public Accountants. The exam is based on the state law where the CPA will do business. Once a person has received their CPA, they are required to take continuing education classes to maintain their knowledge of changes and issues in the accounting industry.
  2. Fiduciary Responsibilities: Businesses are often required to have a monthly financial statement audit or review and must be completed by a CPA. A CPA has the legal duties with anything related to the company’s fiduciaries and has the authority to represent the company those fronts. A non-CPA accountant does not have that legal right.
  3. Taxes and Regulations: An accountant can prepare a tax return, but a licensed CPA has more tax code knowledge and has the legal right to represent their clients with the IRS. 
  4. Code of Ethics and State Requirements: In addition to having a CPA license, continuing education, but they are sworn to follow and uphold the strict code of ethics while meeting the profession’s high standards.

What do small business accountants do?

A small business accountant responsibility to verify data, analyze data, and use that data to generate reports, perform financial reporting records, and perform audits. They also complete balance sheets, income statements, and tax returns. The analysis the accountant has created can be used for the owners to create their forecast while looking at the current business trends, determining where their opportunity for growth. 

Can a CPA help you start a business?

Yes, a licensed CPA can be a great source of help and information for a small business. This should be one of the first people you should see before you get your business off the ground. A CPA for small business taxes is only one benefit of having a CPA on your team staring your new business. Other benefits in addition of having a CPA for small business taxes:

  • Evaluate Business Idea: Your CPA will evaluate the viability of the plan. What may sound good in your mind may not be profitable after figuring in the start-up costs and ongoing cost to run the business.
  • A Business Entity: A CPA for small business taxes will also help you determine that entity a small business should be set up under C corporation, S corporation, LLC, Sole proprietorship, Partnership
  • The business entity has to be right from the beginning, which will determine how the business needs to run. If liability protection is needed, are the business partners, how to budget for estimated taxes, and more. 
  • Tax Responsibilities: Where a CPA for small business taxes is most helpful in advising what various tax responsibilities are required, like payroll taxes, doing business taxes, sales tax to charge, and more. 
  • Set-Up Bookkeeping: A business’s transactions must be kept in a bookkeeping system, including expenses, sales, and returns. A licensed CPS will have the knowledge to set up the system, explain to the owner what their duties are in this regard. 
  • Deductions: A CPA for small business taxes will know what deductions a small business can take, both ordinary, necessary, and complicated.        

How do I choose a CPA for my small business?

Once the decision has been made to hire an accountant or CPA, use the following CPA small business checklist on what to look for from this person

  • Location: Today, a CPA’s location isn’t as important because more businesses are working online with their CPA and with the Cloud, it’s even easier and safer than ever. If you want a CPA that can be hands-on, location is important 
  • Certification:  Ask any CPA you’re considering if they have their current license, update with continuing education, and in good standing with the American Institute of Certified Public Accountants. 
  • Relative Experience Choose a CPA firm for a small business like yours, they’ll be better knowledgeable to with all things small business and not confused with other clients that are large. 
  • Dividing Duties: A CPA will either charge you by the hour or a flat monthly rate.  Don’t give them small daily duties to handle, you’re paying for their knowledge and experience, not daily bookkeeping.
small business with sign

How do I choose a business accountant?     

The following are basics to use to search for a business accountant. You may think of more things to check too. 

  • You need to understand what you need: an accountant or a CPA. What duties and responsibilities do you expect the accountant or CPA to handle – that could tell you that an accountant is sufficient.  
  • Avoid the big accounting firms, stick with an accountant or CPA that specializes in small businesses.  
  • Ask other small business owners for the recommendation of an accountant or CPA they use. 
  • Compare charges and fees, some charge by the hour, some by the month. 3
  • Use Social Media to find CPA firms and accountants.  
  • What accounting software do they use and what do you use? Are they compatible?  Do they use Cloud Technology?

Call 817-905-1040 today for quality CPA services from Don R. Walker, C.P.A.!