Most small business owners begin with a fantastic idea and a passion for what they plan to provide the public. They may spend hundreds of hours organizing themselves to be able to eventually open their doors to the general public. For the majority of individuals, the first few months can be nerve-racking, a baptism by fire if you will. With every passing day, the owners understand more and more about what works and what does not work concerning attracting potential customers and closing sales.
Hopefully the company did their homework prior to opening their doors and found that their business will have taxation obligations which they never had before as individuals. If the company is a company then they will have to pay themselves as W-2 employees. This usually means that the company will withhold payroll tax against the worker (essentially themselves) and have to pay the organization’s half as well. Then, of course, there are deductions that the company may make in order to lower their tax obligation. Sometimes deductions could be made but are overlooked by busy business owners. Things can get complex very fast, and before you know it, that nifty Quickbooks program the owner purchased can turn into quicksand, sucking the most valuable commodity any business owner has time, right out.
Sooner or later, most companies turn to an accountant in order to take care of their financial record keeping. A fast web search for an accountant utilizing Google will return tens of thousands of CPAs, Independent Accountants, and Bookkeepers. At this point, you might be perplexed and ask yourself, what is the difference? Well, why do you think I wrote this article? The recording of daily financial transactions and their appropriate categorization is usually done by a bookkeeper. Some bookkeepers will also provide other services such as the compilation of financial statements, payroll processing, quarterly tax filings, and income tax planning alongside other services. In essence, a bookkeeper that provides all those services is acting as an independent accountant, that is, an accountant that isn’t chartered by the State just like a CPA is. Unlike a bookkeeper or an independent accountant, the CPA (Certified Public Accountant) could perform an audit as well as any of the other tasks that others may perform. Unfortunately, for people, in most nations, the only one of those three professionals that can advertise themselves as an”Accountant,” is a CPA. Makes you wonder just how strong their reception is doesn’t it?
So as to become a CPA, an individual needs to take a certain number of master’s degree courses in accounting together with their undergraduate courses which didn’t necessarily have to be business related. Then, that person can either sit for the state CPA exam immediately then work under the supervision of an already licensed CPA for 2 decades or vice-versa. It is definitely a long and tedious procedure, and they’ll bill you so (student loans don’t come cheap). That is all fine and dandy, and certainly, anyone who puts themselves through that sort of academic analysis is worthy of respect. Nobody is arguing against that. However, as a customer, I am personally trying to find the best cost and the individual who’s going to have the job done correctly. Yes, CPAs are highly educated, but do I really need to pay exorbitant prices to someone who went to school for a decade just for my bookkeeping? My answer is a resounding no. (Particularly when some bookkeepers are highly qualified. Some even hold Master in Business Administration (MBA) degrees). RYAN KAGAN CPA – Home
There are, of course, companies out there that need the stamp of approval that accompanies a certified CPA’s audit of the financial statements. An organization that’s looking to get investors on board to invest tens of thousands of dollars, by way of example, will definitely want a CPA to sign off in their financial statements so as to ease any investor apprehension. Somebody who is seeking to obtain a very large loan by a bank (99 percent of small businesses doesn’t request banks to get loans worth millions of dollars) is going to require a CPA to conduct an audit. But let’s face it, the majority of little to midsize business owners won’t ever have a need for an audit conducted by a CPA. Even if they did require an audit by a CPA that doesn’t mean that they can’t get one with the financial data accumulated by a bookkeeper or an independent accountant.
A CPA is simply going to verify and sign off on the work already done by the bookkeeper (and charge thousands of dollars for his trademark ). Most CPA’s don’t do the actual day to day job that bookkeepers do. They have bookkeepers they keep on employees to do this work or else they outsource the bookkeeping work to some bookkeeping company. So why would anyone want to pay ridiculously high costs to a CPA so as to get their accounting done for their small or medium sized business? Beats me.
In all fairness, I could see how a person with no knowledge of the accounting sector would feel safer going with the CPA. He’s got the degree, the big office, along with the prestige to impress any small business owner’s tastes off. The truth is though, almost any self-respecting, hard-working, serious bookkeeper can perform just as good of a job or even better than that exorbitantly priced CPA at a much fairer price. In reality, if you have ever had your bookkeeping done by a CPA then odds are the job you saw was completed by a trusted bookkeeper. My advice to anyone looking for an accountant would be to spare yourself a great deal of money and provide your fiscal record keeping duties to an expert bookkeeper who supplies another service I mentioned before too. It’s probable that you will not just get a better price, however, you’ll receive better customer service because firms like yours are a bookkeeper’s bread and butter, not just a supplemental source of income because most CPAs perceive their accounting clients to become. Also, however, you will likely develop a long lasting relationship with your bookkeeper and have a great asset in your team. I hope you’ve enjoyed my article for the day and keep tuned for more to come.