Keeping track of income and expenses is essential, even if you don't own a business. And if you do own a business, things get even more complicated. There are paychecks to issue, taxes to track, and subcontractors to pay out. All of these details are a whole lot less challenging when you hire an accountant to oversee them. However, it is still important to know a little bit about accounting yourself. Dig into the articles on this website, and you'll gain a better understanding of accounting principles, what services accountants really offer, and the benefits of hiring these professionals to assist with your finances.
As a business owner, it's important to have a clear understanding of the various financial professionals available to help you manage your finances. Two of the most common financial professionals used by businesses are certified public accountants (CPAs) and accountants. While some people use these terms interchangeably, there are differences between these two professionals. Here are some of the differences between a CPA and an accountant, helping you decide which professional is best for the needs of your business.
Education and Credentials
The primary distinction between a CPA and an accountant is their educational attainment and credentials. To obtain the CPA designation, professionals must successfully complete a demanding examination that evaluates their expertise in accounting, auditing, business law, and taxation. In addition to passing this exam, individuals seeking to become a CPA must meet specific education and experience requirements that vary depending on the state in which they plan to work. In contrast, to become an accountant, a bachelor's degree in accounting is typically all that's required. While both professionals have a solid understanding of accounting principles and practices, CPAs are often seen as having a higher level of knowledge and education, which can make them more attractive to businesses with complex financial needs.
Both CPAs and accountants offer a range of financial services. However, CPAs can provide additional services such as financial planning, investment advice, and management consulting. CPAs are also permitted to represent clients before the IRS and other state tax authorities. Accountants, on the other hand, typically focus on services such as bookkeeping, tax preparation, and financial statement preparation. While both professionals can provide valuable financial services, the decision as to which professional to hire may depend on the specific services needed by your business.
The decision between hiring a CPA or an accountant depends on a variety of factors, such as education and services offered. Although a CPA may provide a wider array of services and possess more education, they generally charge a higher hourly rate. Accountants may be a more affordable option, but they may only be able to provide limited services. Ultimately, the right financial professional depends on your specific needs and the scale of your business. A skilled CPA can be a valuable asset to your business, but not every business requires one, especially if the work is of an uncomplicated nature.
Reach out to a CPA in your area to learn more.