If you’re running a small business and you’re putting all of your attention on growing your company, then the accounting part of the business might get away from you. But without proper accounting, how are you going to know if you’re turning a profit?
At the start, the math for your business might be relatively easy. But as the company grows, you’ll want a CPA. But what does a CPA do?
Keep on reading and we will take you through everything you will want to know!
What Is a CPA?
An accountant is someone who takes care of all of the essential math tasks that need to be handled with running a company. They do financial planning, bookkeeping, and they prepare financial documents like statements and tax returns.
A CPA is an accountant who also meets the experience and educational requirements of the state they reside in. They have also passed the state’s Uniform CPA Exam.
While all CPAs are accountants, not all accountants are CPAs. While a CPA can’t make a business decision for a business, they can offer advice and help steer the company in the right direction.
What Does a CPA Do?
First and foremost, a CPA is usually hired to file and prepare a company’s local, state, and federal tax returns. Beyond filing these items, a CPA can help with various other matters too.
1. Tax Advice and Planning
If there is an audit or some other issue, a CPA can represent you in front of the IRS. They can also answer any questions that a local or state tax board might have.
A CPA can also give you advice to help you reduce your tax burden throughout the year and help make sure that nothing on your returns warrant an audit in the first place.
2. Audit and Assurance Services
A CPA audit is different than an IRS audit. In fact, getting a CPA audit of your company’s finances can be a great way to make sure that you don’t end up facing an audit by the government.
A CPA will give you an unbiased report and make sure that everything looks good.
Assurance services are when a CPA collects all of the necessary information that a company’s executives need and makes sure that the executives understand the information.
3. Management and Consulting
A CPA can help with the management or supervision of a business’s daily financial operations. They can help provide long-term and strategic operations.
This can include things like:
- helping with estate planning
- providing investment advice
- coordinating insurance and risk management
- preparing financial statements
- financial planning
- cash management
A CPA can also help with budgeting.
4. Forensic Accounting
This is also known as fraud auditing or investigative accounting. A CPA will go through a company’s books and look for any evidence of tax evasion, embezzlement, or other hints of criminal conduct.
If you are worried that a business partner might be skimming some money off the top, then you can hire a CPA and help you figure out what’s going on.
Different Roles and Responsibilities of a CPA
Aside from the tasks listed above, a CPA can help with various other parts of running a company. For example, they can act as payroll administrators. A CPA in this role is going to make sure that your employees are paid on time.
They’ll also make sure that all retirement, insurance, and tax withholdings are properly deducted. Your accountant is also going to keep track of any profit-sharing disbursements and expense reimbursements.
A CPA can also be a great choice for the role of bookkeeper. In this position, they will send invoices, collect accounts receivable, and work with vendors. They will make sure that your bills get paid and the money that is owed to you gets into the bank.
You can also utilize a CPA as a long-term planner. A CPA will look at your company’s financial objectives. They will help you figure out how much money you have, how much you are going to need, and how you can get to that point.
As long as you have a financial vision, your CPA should be able to help you realize it.
A CPA can also work as a tax filer for your company. As we already noted, a C{A is going to prepare your tax return. If you need them to, they can also get a filing extension.
A CPA can help make sure that your quarterly taxes are filed on time and in the correct manner. This will save you from having to pay late fees.
You also won’t need to worry about tax problems sneaking up on you.
Tom Wheelwright, from the Wealthability Show, is one example of a knowledgeable and well-rounded CPA.
The Importance of Knowing About CPAs
Hopefully, after reading the above article, you now have an answer to the question, “what does a CPA do?” As we can see, a CPA offers a lot of value to companies and individuals. When you work with a qualified CPA, you’ll be able to make sure that your books and finances are in order and that someone will always be there to have your back.
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