What are CPA Services? How is this Different from Bookkeeping, Tax Prep, and Accounting Services?

hi everyone sherman at life accounting the number one accounting firm for small businesses in today's episode i want to provide you with some more clarity on cpa services now cpas can provide a number of services to small businesses but no other professional can provide all the services that cpas provide so then what are cpa services and what makes them so complicated in this episode you are going to find out by the way if you're new to our channel then be sure to subscribe so you don't miss out on future content that we're putting out to help you manage money and save money in your business all right so what are cpa services cpa services are accounting services that are provided by a certified public accountant also known as a cpa cpas are individuals that pass the hardest professional exam in the world while meeting rigorous educational and experience requirements most cpas have master degrees in business or accounting with at least a few years of experience under a cpa now let's take a look at some specific cpa services i'm going to break down cpa services into two categories services that only cpas can provide in services that cpas are best to provide here are cpa services that only licensed cpas can provide cpa accounting services most commonly include compilations reviews and audits of financial information as well as certain tax services now compilations are basically financial statements that are prepared by an outside accountant so for example if you're self-employed and are applying for a loan the lender might require you to see financial statements that are prepared by a licensed cpa and reviews are services where a cpa simply reviews your financial statements for accuracy so let's say you prepared your own financial statements for example then you might hire a cpa to review the financial statements you prepared for accuracy the cpa would then be required by law to provide you with some type of limited assurance that your financial statements are accurate and if it's not they must disclose it in their review report and then there's audits audits are services where cpas are required to inspect your financial information in accordance to accounting and auditing standards set by the government it is the highest level of assurance that a cpa can provide the cpa must apply certain procedures to test for the accuracy completeness and existence of certain financial information to ensure that there is no fraud or material mistakes audits are commonly performed for non-profit organizations publicly traded companies as well as small businesses who may be applying for business funding or grants to run their business and lastly there are very specific tax services that cpas can provide that other financial professionals cannot unless you're a tax attorney for example a lot of people do not know this but cpas can represent you in court in a tax matter with the irs that's just how powerful the cpa designation is the only other person that can do that is an attorney okay so those are the services that only cpas can do for the most part so basically the gist here is that if you want to make sure your financial information is correct then hire a cpa and if you want the best tax advisor for your business then your best bet is probably to hire a cpa but there are other services that cpas can provide that are not limited to their profession but their credentials make them incredibly qualified for so then let's get into the services that cpas are best at providing all right are you ready drumroll please cpas are best at providing almost all accounting services seriously cpas were tested on all facets of accounting including bookkeeping tax preparation tax planning budgeting pricing and even more technical stuff that i'm sure you're probably not interested in they know the rules of accounting and can act as a trusted advisor to help you plan for taxes manage your finances and overcome business challenges that you've never experienced before but does this mean you need a cpa in order to do your bookkeeping well no not necessarily cpas can be quite expensive and you may not need to pay a cpa 150 an hour to do tedious work for example at life accounting you may speak to one of our cpas but to offer you the best price we hire bookkeepers to perform much of the bookkeeping work for our clients giving you the best of both worlds at the lowest price possible but you may be wondering what's the difference between a bookkeeper accountant and cpa so let's go ahead and get into that let's start with a bookkeeper a bookkeeper is someone who keeps track of your business income and expenses throughout the year in order to generate financial reports they basically record all financial transactions that occurred in the past hence the name bookkeeping then there's your tax preparer a tax preparer is someone who is qualified to file your tax returns this person accepts no responsibility for the accuracy of your tax return as they are simply taking the financial information you provide them and filing it with the irs so for your business your tax preparer would take the books that your bookkeeper prepared and then file your taxes and if that financial information is wrong it can be costly this is why it is very important to make sure you hire the right person to do both your bookkeeping and your taxes now let's talk about your accountant an accountant is a broad term but they could do things like your bookkeeping taxes as well as more advanced accounting items accountants typically have a degree in accounting which means they can do more big picture stuff for your business for example accountants might handle very complex transactions that your bookkeeper may not know how to do and then finally the certified public accountant which is your cpa the highest level in the accounting profession cpas are required by law to keep up with accounting changes tax laws and other continuing education requirements to maintain their license therefore they can provide you with the highest level of assurance and guidance for your business with all that said let's go ahead and talk about the big question do you need a cpa here are some questions you should ask yourself to determine this number one have you read the tax code do you keep up with the changes in the tax code and are you 100 certain that your business entity is the best entity to save on your taxes and number two do you have a budget and is your budget working for you are you profitable and then there's other things like are your employees classified correctly or are they classified as contractors do you understand your financial statements and do you have enough time to take care of all of your accounting responsibilities and if you can the big question is is it worth your time in my experience it's always good to have a cpa in your corner whenever you need one as you run your business you will encounter challenges and a cpa can not only help you with those challenges but they can give you financial advice that you can rely on all right so that's what cpa services are so let's go ahead and recap everything we discussed again cpa services are just accounting services that are provided by a certified public accountant then we discuss very specific types of cpa services there are some that only cpas can and should do like compilations reviews and audits but there are other services that cpas are really good at providing since they're already trained on all accounting principles required by law they are more likely to provide you the highest level of quality for most accounting services if this explanation of cpa services helps you in your journey at all then go ahead and hit that like button for me below and if you don't want to miss future episodes we're pumping out to help you grow your business then be sure to subscribe to our channel that's it for today i'll see you in the next episode [Music]

Channel: LYFE Accounting

Views: 16,725

Keywords: cpa services, accountant vs cpa, cpa

Id: FKZv8FHDdJQ

Length: 9min 4sec (544 seconds)

Published: Wed Mar 10 2021