Not all accountants are CPAs, but all CPAs are accountants. Learn what a CPA can do for your business and how to determine the right CPA for your business.
Time to hire a CPA?
You’re running a small business and serving your customers well. In return, they’re rewarding you with the one thing every business needs to thrive-money.Maybe you’ve started making so much money, and your business is growing so fast, that it’s time to get someone to help keep track of that money. Maybe it’s time to hire a Certified Public Accountant (CPA).
An accountant is a professional who takes care of all the detailed and essential math tasks that go along with running a business. They do bookkeeping, prepare financial documents like tax returns and profit-and-loss statements and do financial planning. A CPA is an accountant who also meets your state’s educational and experience requirements, and has passed the state’s Uniform CPA Exam.
In other words, all CPAs are accountants but not all accountants are CPAs. And while a CPA shouldn’t make business decisions for you, they can offer good advice and help you make the right decisions. In addition, they can handle other tasks:
Bookkeeping - Handling invoices and accounts receivable, making sure bills get paid on time and paying vendors.
Payroll administration - Making sure everyone gets paid on time, and all payroll withholdings are handled correctly.
Tax advice and planning - Helping your business save on taxes now and planning for future tax situations.
Audit and assurance - Finding problems with your tax returns before the IRS does.
Management and consulting - Serving as your chief financial officer (CFO), helping with budgeting, risk management and preparing financial statements for shareholders.
Forensic accounting - Digging into the books to help you prevent or discover fraud or embezzlement.
Questions to Ask
You’ll want to ask some questions about your potential CPA’s experience, size of the teams they’ve worked with, if they have a specialty and what that specialty is. Here are a few to get you started:
How long have you been a CPA? If you have a complicated accounting situation, you don’t want someone who just graduated from accounting school. Get a CPA with at least two solid years of experience.
Are you available year-round? If you just need a CPA for a one-time audit or to file your taxes once, this may not seem like a big deal. But if something comes up, you want to make sure this is their full-time job, not a side hustle they work only during tax season.
Can you represent me in front of the IRS? Many CPAs are also Enrolled Agents. This means if you get into trouble with the IRS, they can represent you at hearings and speak for your business. Getting audited by the IRS can feel like the Spanish Inquisition, so having someone in your corner is important.
Who will I be working with? It’s not uncommon for a CPA to have a staff that helps them. Find out how big their team is, what qualifications they have and how they prefer to communicate.
How much do you charge? It’s perfectly acceptable to ask about fees and how they bill. Some services may be a straight fee-for-service charged by the job, while others might bill hourly. Get an estimate in writing.
I don’t have to tell you that running a business is hard work. You live it every single day. Most small business owners spend 120 hours or more on bookkeeping alone every year. And that’s time you could spend serving your customers and growing your business!
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