These days there are plenty of options for anyone looking for help managing their finances. Financial planners provide overall guidance for money management, investing and retirement planning, but for day-to-day financial management and procedures people often look to accountants or CPAs. While Accountants and CPAs are often thought of as the same, there are definite differences and here are three reasons why a CPA can be the best option.
- All CPAs are accountants, but not all accountants are CPAs.
While accountants are highly trained financial professionals, they’re not licensed. CPAs on the other hand, are licensed and certified through the completion of rigorous education and training which includes:
- An accounting degree from an accredited college or university
- Passing the four-part CPA Examination
- Successful completion of the American Institute of CPAs Professional Ethics Exam
- 1,800 working hours completed under the supervision of an actively licensed CPA
- Ongoing compliance with continuing education requirements to maintain their license
- CPAs offer comprehensive services
If you’re a small business owner, hiring a CPA rather than an accountant can be especially advantageous. While each function plays an important part in managing business finances, again, there are differences. Accountants oversee and manage bookkeeping functions, then analyze the financials and prepare financial reports.
While a CPA has the experience to provide all those services, they will also provide big-picture assessments of all facets of your business finances as well as management of:
- Business analysis, growth planning and risk assessment.
- Creation and set up of the right accounting system for your business
- Regular analysis of income, expenses and cash flow that provide ongoing insight on your business’s overall financial health
- Budget creation and audits
- Review and preparation of necessary financial statements
- Investment management
- CPAs are Tax Experts.
No one wants to pay more in taxes than they need to. CPAs stay current with all local, state and federal tax regulations, and can prepare accurate tax returns for any situation. A CPA will can provide tax planning strategies to help clients keep tax liabilities as low as possible from year to year, and also have the knowledge to resolve tax problems such as unfiled or late returns, settlement of IRS debt through a payment plan or an Offer in Compromise and Innocent Spouse Relief for victims of spousal fraud A CPA is also licensed to fully represent clients and make claims on their behalf during any IRS audit proceeding.