If you are the owner of a business, no matter how big or small it is, you would need a certified tax and financial advisor. Most small businesses and start-ups make the mistake of appointing an accountant and not a CPA (Certified Public Accountant). As a business owner, you might wonder what better services would a CPA in Santa Monica offer that an accountant could not.
Why CPA gets more pointers than an accountant?
An accountant is a general term, which refers to the tax and financial professionals, who follow some specific rules and regulations, including the GAAP (Generally Accepted Accounting Principles). These rules and regulations are usually set forth by the FASB (Financial Accounting Standards Board).
On the other hand, a CPA is an accountant who has passed a special licensing examination in the state. So, you can clearly understand that all CPAs are accountants but all accountants are not CPAs. Most small businesses fail to make a mark in the industry because they work with accountants, who look after the accounting needs but cannot give proper financial advice to you for getting future investors.
How are CPAs beneficial for your business?
Even if your business is a start-up or small in size, you would benefit from the services of a CPA. The manifold benefits of hiring a CPA in Brentwood or Santa Monica firm are as follows:
CPA has more familiarity with tax laws: CPAs are more familiar with the tax laws than the accountants. Having knowledge of tax codes is an integral part of a CPA’s licensing examination. It is mandatory for the CPA to take tax courses each year, in order to keep updated with the tax codes. An experienced accountant might also have the knowledge to prepare tax returns and sign the same, but his/her designation does not provide the reassurance of certification. An accountant does not have the ability to represent your business before the IRS, even if he has signed the tax return. In fact, the IRS classifies such an accountant as “unenrolled preparer”.
CPAs come with state license: All the CPAs are licensed by a state and they need to keep themselves updated with the current tax laws. At regular intervals, a CPA needs to clear an examination that is quite rigorous and renew his/her certificate. On the other hand, an accountant does not come with a license.
Apart from these, a CPA does a financial analysis and advise you on financial and tax matters, supports you in an IRS audit, and prepares projects to get more investors.