Know about CPAs and their service benefits

Keeping your finances well maintained is the prime focus of any business, especially in the United States. Many business owners fail to maintain proper accounting records. Should the IRS audit happen, owners will lose their tax deductions since they can’t provide the IRS with supporting financial documentation. Therefore, a business owner must have his books in order. One of the best choices you can make as a small business owner is to hire someone to assist you with income tax and bookkeeping.  That someone will relieve you of the accounting headache and make sure that you are in the position to win the IRS audit. That someone is a CPA.

What did you mean by CPA?

A CPA is an acronym for a certified public accountant, a person whose key role is to carry out advisory roles among which are income tax and bookkeeping. To become a CPA, an accountant must go through five years of accounting school, take rigorous exams and work under another CPA for at least two years. CPAs go through an extensive background check and are required to take yearly accounting classes. There are different kinds of services a CPA can perform. And usually, CPAs focus only on one niche. Those niches are:

1. Audits and reviews. There are CPAs that focus only on the Audit side of the accounting. If a client’s financial statements meet the CPA’s assessment requirements, the CPA will issue an auditor’s opinion on the financial statements. This document will be later provided to third parties, such as lenders, investors, or government agencies. A review is a less formal version of an audit. The review takes less time to conduct and usually costs less to the client.
2. Consulting services. Some CPAs conduct a variety of consulting services, such as advising on the efficacy of a control system, describing potential strategic alternatives, or assisting with the implementation of information systems. 
3. Taxation services. A significant service area for a CPA is advising clients on their tax plans and filing their tax returns. The most common tax returns are forms 1040, 1020, and 1065. Tax CPAs perform tax planning, which can save their clients lots of money. Very often tax CPAs offer bookkeeping services as well. This way they prepare financial statements and use these financial statements to prepare the tax returns. Tax CPAs can also represent clients in the IRS audits.
4. Financial planning. A CPA may offer financial planning advice to a customer, such as how to sell a company to a buyer with the least amount of tax liability. They also advise on estate planning, retirement contributions, and saving for kids’ college. 

These are the key services that a CPA offers to his/her clients which help them grow their businesses and maintain financial independence and prosperity. In most cases, CPAs are essential for income tax and bookkeeping.

Paul Petersen