Most small business owners start out with a fantastic idea and a passion for the things they intend to offer the public. They may spend hundreds of hours organizing themselves to be able to eventually open their doors to the public. For nearly all individuals, the very first couple of months may be nerve-racking, a baptism by fire if you will. With each passing day, the owners learn more and more about what works and what doesn’t work in terms of attracting potential clients and final sales.
Hopefully, the firm did their homework before opening their doors and found that their business will have taxation obligations which they never had before as individuals. If the organization is a company then they will have to cover themselves as W-2 employees. This means that the company will withhold payroll tax from the worker (essentially themselves) and also have to pay the organization’s half too. Then, of course, there are deductions that the company can make in order to lower their tax obligation. Sometimes deductions can be made but are overlooked by busy business owners. Things can get complicated very quickly, 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, many companies turn into an accountant in order to take care of their fiscal record keeping. A quick web search for an accountant using Google will return tens of thousands of CPAs, Independent Accountants, and Bookkeepers. Now, you may be confused and ask yourself, what’s the difference? Well, why is it that you think I wrote this report? The listing of all daily financial transactions and their appropriate categorization is usually done by means of a bookkeeper. Some bookkeepers will also provide other services like the compilation of financial statements, payroll processing, quarterly tax filings, and income tax preparation along with other services. Essentially, a bookkeeper that provides all of those services is acting as an independent accountant, that is, an accountant which is not chartered by the State just like a CPA is. Unlike a bookkeeper or an independent accountant, the CPA (Certified Public Accountant) can perform an audit as well as any of the other tasks which others can perform. Unfortunately, for people, in most nations, the only one of those three professionals who can advertise themselves as an”Accountant,” is a CPA. Makes you wonder exactly how strong their reception is does not it?
In order to become a CPA, a individual has to take a particular number of master’s level courses in accounting together with their undergraduate courses which didn’t necessarily need to be business related. Then, that person can either sit for the nation CPA exam immediately and then work under the oversight of an already licensed CPA for two decades or vice-versa. It is definitely a lengthy and tedious procedure, and they’ll charge you accordingly (student loans do not come cheap). That is all fine and dandy, and certainly anyone who puts themselves through that kind of academic analysis is worthy of respect. Nobody is arguing against that. However, as a customer, I’m personally looking for the best cost and the person who’s going to have the work done right. Yes, CPAs are highly educated, but do I really want to pay exorbitant costs to someone who went to college for a decade only for my bookkeeping? My answer is a resounding no. (Especially when a few bookkeepers are exceptionally qualified. Some even hold Master in Business Administration (MBA) degrees). You can contact Ryan Kagan here.
There are, of course, companies out there that need the stamp of approval that accompanies a certified CPA’s audit of their financial statements. A company that’s wanting to get investors on board to spend millions of dollars, for instance, will definitely want a CPA to sign off on their financial statements so as to facilitate any investor apprehension. Somebody who’s seeking to obtain a very large loan by a lender (99% of small businesses does not request banks to get loans worth millions of dollars) is also going to require a CPA to conduct an audit. But let us face it, the vast majority of small to medium-sized business owners won’t ever have a need for an audit conducted by a CPA. Even when they did require an audit from a CPA that doesn’t mean that they can not get one with the financial data accumulated by a bookkeeper or an independent accountant.
A CPA is simply going to confirm and sign off on the work already done by the bookkeeper (and charge thousands of dollars for his trademark ). Many CPA’s don’t do the real day to day work that bookkeepers do. They either have bookkeepers they continue staff to perform that work or they outsource the bookkeeping work to a bookkeeping company. So why would anyone want to pay ridiculously substantial costs to a CPA so as to receive their accounting done for their small or medium sized business? Beats me.
In all fairness, I could see how someone with no knowledge of the accounting industry would feel safer traveling with the CPA. He’s got the level, the huge office, along with the prestige to impress any small business owner’s socks off. The truth is however, any self-respecting, hard-working, serious bookkeeper can perform as good of a job or even better than that exorbitantly priced CPA in a much fairer cost. In fact, if you’ve ever had your accounting done by a CPA then chances are the work you saw was done by a trusted bookkeeper. My advice to anyone looking for an accountant would be to save yourself a great deal of money and provide your financial record keeping duties to an expert bookkeeper who provides the other services I mentioned previously as well. It’s probable that you won’t only get a better price, however you will get better customer support because companies such as 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 probably develop a long-lasting relationship with your bookkeeper and possess a fantastic advantage in your team. I hope you have enjoyed my article for the day and keep tuned for more to come.