“They should give me one less thing to worry about,” wrote a provider of vocational employment training services. Similarly, an operator of a snow sports academy and snow and athletic camps simply wanted their accountant to “take care of the financial side so I can focus on running the business. CPAs are experts in small business finance including taxes, financial reporting, business advisory, personal financial planning as well as bookkeeping and payroll processing.

Small businesses and freelancers are often set up as a sole proprietorship or single-member LLC, meaning all income or loss is reported on an cpa vs accountant individual return. In an interesting correlation, 96% of small business owners who use HR software see their accountant as a trusted advisor.

Services

Accountants, especially us, have seen just about everything, so don’t think you’re alone. Usually, our prospect calls for our small business clients fit into one of two profiles of business owners. So instead of answering that for you directly, we’re going to talk about the differences between what a bookkeeper does and what an accountant/tax preparer/CPA does for a small business.

• This is true whether you have a physical store, an online business, or run a service business.
• Sometimes clients realize that a product they thought was doing well is actually costing them or that a product they were ready to drop accounts for a large part of their profits.
• It is true, for example, that not all accountants are CPAs, but they are qualified to process your business tax returns.
• They can pass useful information on to their small businesses owners and talk in detail about when and why they would be suitable for your business to use.
• In the unfortunate case of an audit, a CPA can represent your company before the IRS and execute claims on your company’s behalf, something an accountant cannot do.

It isn’t uncommon for an accountant to have a staff that provides support. Find out the size of their firm and their team members’ qualifications before deciding if this is a fit for you. If you’re a very small business, it’s probably best to work with an accounting firm that’s also small and can provide more personalized attention. You’ll also want to establish expectations regarding communication—how often you’ll connect and in what way. If you received the recommendation from the IRS, your state board of accountancy, or a state CPA society, those credentials are most likely legitimate.

Is a CPA better than an Accountant?

Do you need a CPA for accounting and payroll alone, or do you need an in-house financial advisor? After identifying company-specific needs, you can begin the search.