What is a CPA and What Do They Do?
What is a CPA and What Do They Do?
When it comes to business finances, it's easy to lose track of what's been spent and where. As an entrepreneur starting out from a freelance position, or a small business with lots of small transactions, the paper trail can get very confusing.
Then you get the dreaded notice: it's audit time. Your business financials are going to be under the microscope - and you have no idea where to start.
You don't need to panic when it's time to be audited, though. What you need is a CPA.
If you just asked yourself: "what is a CPA?" don't panic. Here's your quick guide to understanding what a CPA can do for your business.
What is a CPA?
A certified public accountant (CPA) is specially trained and licensed to handle your business finances.
There are certain regulations every CPA must adhere to so you can be sure of a trusted financial adviser who knows their stuff.
A CPA must complete an official exam, and also rigorous work experience requirements, before they become qualified. In addition, a CPA has to commit to continued professional development with ongoing education throughout their career.
What Does a CPA do?
Auditing is the superpower of every CPA worldwide.
A CPA knows how to create and follow a paper trail to construct a clear picture of your financial health. Their accounting experience means they can develop an overview of your business spending, consolidate records, and build a comprehensive financial report.
With a CPA on board, you'll also find out where you can improve your processes to make sure the next audit isn't so scary.
It Isn't All About Auditing
A CPA isn't just for audits: they can help with the full range of professional accounting services any business may need.
As a trained accountant that's passed very difficult exams to gain a CPA license, their skill set is broad and the individual will be highly knowledgeable.
Other services you'll find a CPA qualified for will include:
Financial Planning Advice
Whether you're just starting out or you're ready to grow your business, a CPA can assist with financial planning advice.
A CPA can also provide inheritance financial planning to allow you to bequeath assets in a way that minimizes tax implications for the recipients.
The most common use of a certified accountant, taxation services by a CPA will make your tax return as simple as possible.
It's often worth paying for an independent CPA at the end of the financial year to prepare your tax returns, as they will know how to make sure you are writing off the correct expenses and only pay the taxes you actually owe.
Some CPAs specialize in litigation services to provide an unbiased professional opinion for their client to help them win a court case.
Common cases that use litigation services by a CPA will be bankruptcy, divorce, or disputes with customers or suppliers.
Business Consultation and Reviews
A CPA can review your business, which is less costly than an audit but will still give you a fair picture of your current financial health.
The trained financial adviser will show you where you can streamline processes to save money, and suggest ways you can invest to achieve business growth.
Do You Need a CPA?
You asked yourself, "What is a CPA?" and now, hopefully, have some answers.
Now you know how a CPA can help your small business, it's time to find one who understands exactly what you need to improve your financial health and audit readiness.
Contact us today to find out more about our CPA services and book a free consultation.