Alyssa Gregory at Small Business Information has a new article about why your small business needs an accountant. Every business, no matter how small, needs a financial and tax advisor for all the reasons Alyssa mentioned. But I would go further and specify that your business needs a Certified Public Accountant (CPA), not just an accountant.
A personal story from GenerationXFinance shows how a CPA can save you money at tax time; a CPA found an additional $1500 in savings for the blogger. From my own experience, I find my CPA a big help in making business decisions. I have an LLC for my own business, and we discussed tax benefits of LLC vs. sole proprietorship as they relate to taxes.
Advantages of a CPA for Your Business
1. Licensing. A CPA is A CPA is licensed by a state, and must keep current with tax laws in order to maintain a license in that state. Accountants aren't licensed. I have several CPA's in my family and I can attest to the strictness of the exams and study and continuing education requirements for CPA's.
2.Taxes. While not all CPA's specialize in small business taxes, almost all CPA's are more familiar with tax laws than are accountants. Knowledge of the tax code is a big part of a CPA's licensing exam.
3. Audit support. Probably the biggest reason to use a CPA for your business taxes is that a CPA is eligible to represent you before the IRS, while an accountant is not.
In other words, all CPA's are accountants, but not all accountants are CPA's. Accountants do the routine work, while CPA's can analyze the work and help you make more high-level business and tax decisions. Sure, CPA's charge more, but you get what you pay for.
My suggestion: Find a CPA firm that includes a bookkeeper and accountant. Then you can separate the more routine financial jobs from the tax and financial analysis done by the CPA. Or hire a bookkeeper for those monthly, quarterly and yearly financial reports, then periodically consult with your CPA and have your CPA do your business taxes.
More on CPA's vs. Accountants
More on Finding and Working with a CPA
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