Accounting is often called the "language of business" because it deals with interpreting and communicating information about a company's operations and finances. Therefore, it is always a better option to take professional help from a CPA. Now the question is, what is a CPA?

Certified Public Accountants (CPAs) act as advisers to individuals, businesses, financial institutions, non-profit organizations and government agencies on a wide range of financial matters. Today, many individuals and businesses turn to CPAs for help with tax preparation, personal financial planning, auditing services, and advice on developing effective accounting systems.

What can a CPA do for you?

CPAs are no longer just number crunchers and tax preparers. They are business and financial strategists who help chart the paths of businesses and individuals. Individuals turn to their CPAs for tax and financial planning services, investment advice, estate planning, and more.

Businesses are tapping CPAs to not only manage finances and taxes, but also to determine profitable new product lines, help diversify investments, and provide a variety of other consulting and business services. They can prove to be your trusted financial advisor, as they have passed the rigorous CPA Exam, met work experience requirements, and has taken professional education courses to maintain their CPA certification, which makes them a reliable person with your business and financial planning.

Difference between CPA, Bookkeeper and an Accountant

A bookkeeper is someone who works for a company to keep the financial books. He is responsible for accurately recording transactions, including accounts receivable, accounts payable, inventory, and sometimes payroll and providing reports on a monthly, quarterly, and annual basis.

An Accountant on the other hand, is a level up from a bookkeeper as they can also perform bookkeeping functions but they are usually hired for preparing detailed financial statements, performing audits of the books of public companies, and they prepare reports for tax purposes.

However, a CPA has an additional level of credibility and expertise. In addition to preparing and reviewing financial statements, CPAs also prepare tax returns for businesses and individuals, sign tax returns, and represent taxpayers before the IRS for audits and other matters.

Reasons for hiring a CPA

Many businesses, especially large corporations, look for CPAs to fill accounting positions, especially higher level and management positions. Therefore, now a days CPAs are considered as a distinguished personality from other finance professionals because of their stringent qualification and knowledge. You may also consider the following reasons to hire a CPA,

• Tax compliance – For most people, keeping track of the changing tax laws can be difficult at best. If you aren’t constantly paying attention, you could miss something important. In this case, a CPA can help you with your tax return by considering the points such as, What forms do you need to file as per the new laws and what are their due dates? What income is taxable under the new provision and what expenses are deductible?

• Budgeting – CPAs can help create your organization’s initial budget, develop reasonable estimates, determine the drivers behind revenue and expenditures; figure breakeven points, etc.

• Accounting Software set-up – You can get help with accounting software set-up and training, as well as internal controls.

• Payroll preparation – Because they’re complicated, it’s easy to make mistakes with payroll taxes. A CPA can assist in client payroll systems and payroll outsourcing options.

• Financial statement preparation – Compiled or reviewed financial statements may be needed for management purposes, financing or bonding.

• Financial recommendations – These include asset purchase decisions, return on investment, buy or lease, etc. Also, in case if you have multiple sources of income, a CPA can help you sort through how to report everything correctly.

• Credibility – Having a CPA prepare or review financial statements and tax returns gives you and your company credibility.

• Cash flow analysis – Preparation of projections, estimates or proformas correlates directly with budgeting.

• Reducing Debt: Getting out of debt can be extremely challenging. But knowing how to manage it, negotiate with creditors, and prevent you from being bullied is exactly what a certified public accountant is for.

Hence, it is always a better option if you can hire a Certified Public Accountant (CPA) to ensure that you are getting the best expert advice.

Written by Tax Professionals