Are you struggling to keep track of your small business’s finances? If so, perhaps it’s time to hire a professional accountant. They’ll take this burden off your shoulders, allowing you to focus on what really matters: developing a successful business. Not all accountants are the same, however. Some are classified as Certified Public Accountants (CPAs). So, what is a CPA exactly?
Overview of CPAs
A CPA is a professional accountant who’s passed the Uniform Certified Public Accountant Examination to become licensed in his or her respective state. Not all professional accountants are CPAs. Unless an accountant passes the exam — as well as meets his or her state’s other licensure requirement — he or she isn’t a CPA.
CPAs can work for either themselves or for part of a larger accounting firm. A CPA who operates as a sole proprietorship works for his or herself. In comparison, other CPAs work for a large firm consisting of dozens or even hundreds of CPAs.
To say there are a lot of CPAs in the United States would be an understatement. Statistics show that are currently over 664,000 licensed CPAs, according to the National Association of State Boards Accountancy (NASBA).
Requirements for Becoming a CPA
To become a CPA, professional accountants must take and pass a thorough exam that tests their knowledge of accounting practices. Known as the Uniform Certified Public Accountant Examination, it’s available for accountants throughout the country.
With that said, the exam is regulated by each state. Some states use the 150 rule, which states that accountants must complete an additional year of education beyond a four-year or master’s degree, whereas other states have slightly less-stringent requirements for taking the Uniform Certified Public Accountant Examination.
The Benefits of Hiring a CPA
By hiring a CPA, you can rest assured knowing that your small business’s finances are being handled by a skilled and trained professional accountant. As you may know, otherwise small accounting mistakes can cost your small business big bucks. With a CPA, however, your small business will have accurate and clean financial records.
Furthermore, a CPA can represent your small business if it’s audited by the Internal Revenue Service (IRS). Only CPAs are given the authority to represent their clients during an IRS audit. Non-CPA accountants can not offer representation during an IRS audit.
Have anything else that you’d like to add? Let us know in the comments section below!