What Is A Certified Public Accountant?

A Certified Public Accountant or CPA is a special type of accountant. Officially it's the title of someone in the United States, who has passed the Uniform Certified Public Accounting Examination and has met some additional state education and experience requirements to get this certification. This test is grueling and requires upwards of 150 hours of special education.

But what does this mean to you as a small business owner. Do you need a CPA or will a regular accountant or even a bookkeeper be sufficient for your business?

Most people use the term CPA and accountant interchangeably but there is a very big difference. The CPA designation carries a lot of weight within the financial community and certainly within the accounting profession.

Services Provided By Certified Public Accountants

In public accounting, those accounting services provided to a business on a contract basis, a CPA attests to and gives assurances that financial statements are reasonable and accurate and adhere to generally accepted accounting principles (GAAP). They also attest to the reasonableness of disclosures and that statements are free from "material misstatement".

As an auditor, a CPA's are required by professional standards and Federal and State laws to maintain independence from the entity for which they are conducting an audit and review, often called an attestation.

A CPA can also work as a consultant, advising companies on acceptable business practices and making recommendations on financial management. Typically these consultants do not work as auditors for a company at the same time they are acting as consultants.

As part of the certification, a CPA must complete 40 hours of continuing professional education (CPE) every year to keep up with the new rules and regulations in the financial, accounting, and business world. This is proof of the high level of expectations of the accounting profession for a Certified Public Accountant.

Typically a Certified Public Accountant will belong to a state association with the goal of keeping up to date with the accounting community and taking continuing education classes. Of course tax laws change frequently and any good CPA will spend time staying abreast of changes in financial areas. As a member of a local association they have access to the latest thinking and rules in the accounting area.

Why You Need A CPA

If for no other reason than Tax Planning it's good to have the advice of an accountant. And as far as business management and financial advice access to a good accountant is very desirable.

But does that mean you need a CPA?

In general you can assume that anyone who has taken the time to get certified as a CPA, and maintain that certification, is at the upper levels of the skill set of an accountant. It's a clear credibility booster to be a CPA. If your business can afford the best than a CPA is worth the money.

But does that mean they are better than a typical accountant. Of course not. But it does indicate a level of commitment that is worth considering. Certainly if legal proceedings are required, the assurance of a CPA will hold more weight than a typical accountant. Again much depends on the reputation of the CPA in the community as well. Certainly an audit by a CPA has an implied level of credibility.

And CPA's do much more than audits these days. They provide consulting and overall financial planning not only for small and large businesses but also for estate planning, investments, and strategic planning.

So if you want to run your business at the highest level you certainly want to consider hiring a Certified Public accountant like the ones at Clearwater Accountants.

Rick Hart is a business consultant. He provides tools for accountants in Clearwater and for many businesses in the area.
http://www.accountantclearwater.com/

http://EzineArticles.com/6512487

How An Accountant Can Help

If you're a small business you're busy running your business and may not have time to pay attention to financial matters. Yet deep down you know it's critical for the success of your business. You know you need an accountant to help you.

As a small business you have money coming in from the solutions you provide and money going out for your expenses. Knowing the difference between the two may seem like an easy process but of course it isn't. Knowing the difference between your Gross Income and your Net Income can be tricky. It's not as simple as balancing your checkbook at the end of the month and knowing what you made. Expenses can often be subtle or even hidden in that checkbook. There may be problems that you cannot see until it's too late.

For example, your borrowing has a cost that is not readily visible. You pay interest on loans for buildings, equipment, services, and many more functions. You have banking fees. You pay for business meals and transportation expenses like gas and repairs.

These are all the cost of doing business. But sound tracking and management of these expenses can mean the difference between making money at the end of the month and perhaps even success or failure at the end of the year. That's where a good accountant can help.

Create A Solid Business Plan

Now take your business plan. You do have a business plan don't you? Without a business plan that includes budgeting, forecasting, and contingency planning, you are just guessing and probably guessing wrong.

A solid business plan will help you anticipate growth and... yes the opposite. You must plan for downturns as well as growth. Knowing what to do during bad times will do several things.

1. It will give you the tools to survive

2. It will lower your stress level because you know you have a plan

3. Proper tracking will tell you when you are failing before it's too late

And beyond your Business Plan you should also have these types of management reporting tools in place...
Profit and Loss statementBalance sheetStatement of cash flowSub-ledgers and journalsSales reportsGeneral ledgerPayrollBank reconciliationsA/P and A/R aging reports

And Don't Forget About Taxes

Taxes are one of those things that can bite you when you are least expecting it. Adequate tax planning can be one of those things that you don't think of until it's too late. Are you paying your estimated income tax on time. Are you paying the right amounts. If your business has grown or shrunk you could be paying an incorrect amount.With the help of an accountant who can help you setup these types of financial management tools and answer those important questions before it's too late. Once you have these tools in place you'll have your finger on the pulse of your business. And whether you do it yourself or hire a good accountant you'll be prepared for whatever the economy throws at you.

Rick Hart is a business consultant. He provides tools for accountants in Clearwater and for many businesses in the area.

http://www.accountantclearwater.com/

http://EzineArticles.com/6509617