When running a small business, every dollar counts. Because of that, many small business owners simply use an accountant or try to navigate as much as possible out on their own. The problem with that idea? It often ends up being more costly, as business owners are not always knowledgeable of all of the potential write-offs, they risk potential audits, and representation, if necessary, is harder to find.
A CPA, on the other hand, is a professional accountant who is licensed by their state. Their skill set and expertise, along with the capabilities the license allows, is essential for every small business owner, no matter the size of the actual business.
1. CPAs must have up-to-date knowledge to hold their license
Unlike an accountant, a CPA is required to keep current with tax laws in order to maintain licensure. In addition, CPAs are mandated to fulfill continuing education requirements. This means, when working with a CPA, you know your business will be taking advantage of and in accordance with all laws and regulations.
Accountants are able to perform audits, prepare financial statements, help with bookkeeping, complete business tax preparation, and advise on accounting systems. However, there are some audits, such as mandatory audits for publicly traded companies, that only a CPA can complete.
2. CPAs can represent their clients
Accountants have specific but limited representation rights. They are only able to represent a client if they have prepared and signed that client’s tax returns. CPAs, however, have the ability to represent clients in a number of cases, including those involving payments and collections, audits, and appeals.
3. CPAs represent clients before the IRS in audits
The primary benefit to working with a CPA over an accountant is that a CPA has the ability to represent you if you receive an IRS audit. Following an audit, an appeals process may be the next step, and if violations are found, you will likely need representation. A CPA, with expertise in all tax laws, would play a pivotal role in helping your company should this occur.
Hiring a CPA can save your business time, money, and a wealth of anxiety. By contacting a local CPA firm in Charlotte, you are ensuring everything is done correctly the first time and avoiding the headache of an audit or potential penalties in the future.