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2 Replies Last post: Nov 4, 2008 1:52 PM by Santa Fe CPA

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Accountant/CPA Question

Oct 23, 2008 6:35 PM

Mogul

bpfinance 16 posts since
Oct 22, 2008

My first question, is what is the difference between an accountant and a CPA, other than their actual license. I know a CPA is the highest license and accountant receives, but do they do anything different? Does an accountant not prepare taxes? Are CPAs really better? or do they just get to charge more? Do they both prepare taxes, or does only one or the other prepare taxes?

If I use quickbooks, is it necessary to have an accountant, or just a tax preparer? Or are they the same thing?

Also, where can I find a good accountant/tax preparer? I already know basically all of the forms and everything that I have to file, but I just don't want to screw something up, especially because we are just starting to add employees (in the hiring stages). I also think that my time could be better spent working on other aspects of the business. Would a tax preparer/accountant be considered an employee, or just an independent contractor.

Also, is it necessary to have a lawyer. Do company lawyers get paid as employees, or just when I need something from them, they already know everything about my business so that they can answer the question easily?

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Professional

SOLUTIONSHR 7 posts since
Nov 13, 2007

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1. Re: Accountant/CPA Question Oct 24, 2008 8:35 AM

An accountant is more of a general term for a finance professional. They have met the educational requirements to obtain their accounting degree but they have not been certified in any way that they actually know what they are doing other than their education. A CPA is licensed by their state and has passed the state exam. Either can prepare taxes.

Even if you use Quickbooks, you should have an accountant. A professional financial audit can only be certified by a CPA.

I would recommend a couple of different levels to this. For you payroll needs you should contract with a payroll service. They will do the payroll for you as we as file all of the related tax returns. The cost is very minimal and it gives you time back to focus on your business. For the other financial aspects of the business you should have a CPA. Most CPA firms also employ accountants to handle the more day to day activities.

As far as a lawyer, if you are making legal decisions then yes you should have the imput from a professional. On a day to day basis a lawyer is generally not necessary for a small business but that could vary depending upon what industry you are in.

I am the owner of SOLUTIONS Human Resources. We provide Payroll Processing Services, Human Resources Outsourcing and Consulting Services, Training and Insurance Benefit Services. I would be glad to provide you with a no obligation quote. We also have a partnership with Tax Talk Online who provides bookkeeping and tax preparation services. They do all the work for a lot less than a CPA will charge. You will then only need a CPA to review the work.

If interested, please contact me at 800-928-7449 or via email at ghardy@solutionshr.com. You can also vist our web site at www.solutionshr.com.

Thanks, Greg

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Mogul

Santa Fe CPA 67 posts since
Oct 10, 2007

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2. Re: Accountant/CPA Question Nov 4, 2008 1:52 PM

Hello bpfinance.

THe primary difference between a CPA and a non licensed accountant/bookkeeper is continuing education requirements. In order to maintain our license we must complete 40 hours of continuing professional education each year. This inculdes annual updates on changes in the tax code and regulations as well as the professional standards decreed by the accounting standards board and the SEC. In addition we are automatically qualified to represent our clients in procedings before the IRS or State tax folks in the event of a tax audit.

A "Tax Preparer" is not necessarily educated in the tax code and accounting rules. These folks are the entry level of the tax business.

To find a CPA you may inquire at the State Board of Accountancy in yoyr locality for a few references and then check them out. THe CPA would then be a vendor to your company.

A small busines does need a Lawyer, but not as an employee. They are available to perform the various one time tasks that are encountered in business. You should establish a relationship with one who is familiar with business and contract law.

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