Your company's finances are its lifeblood. As a result, selecting the correct professional to manage your finances is critical to your success.
The terms bookkeeper, accountant, and CPA are frequently used interchangeably in the accounting world. However, each finance professional is unique, with varied responsibilities and benefits.
Accounting bachelor's degrees are required of accountants. After completing education requirements, working in the accounting field, and passing a test, a Certified Public Accountant is granted.
The requirements differ from one state to the next. To put it another way, a CPA is more likely to be knowledgeable about accounting than someone who does not hold the qualification. CPAs can also undertake tasks that typical accountants are unable to.
What are an accountant's responsibilities?
To thrive in any company environment, accountants must have a variety of talents. They must ensure that they are prepared to handle the following after receiving a bachelor's degree:
Management of financial data
Accountants must be able to work with enormous amounts of financial information in spreadsheets, charts, and other formats. They must also have computer abilities in order to maintain and use digital databases through various software applications.
This can include:
- Accounts payable
- Accounts receivable
- Depreciation entry
- Journal entries
Depending on the company, accountants may also supervise bookkeepers or accounting clerks and handle payroll.
Advice and analysis
Accountants are frequently called upon to give financial advice to their superiors or management teams. CEOs may consult accountants to explain a company's financial situation in-depth and advise on various options, especially in smaller organizations with fewer financial professionals.
Accountants are required to operate within particular restrictions, ensuring that they comply with regulations while reporting income, spending, and other financial problems. Accountants must be able to answer inquiries and explain any discrepancies in the case of an audit.
Finance report preparation
Accountants generate annual or quarterly financial reports for submission. They frequently engage investors or board members in these discussions to keep them informed about the company's operations. Accountants are usually taught how to generate these reports using specialized software such a Quickbooks Online.
What are a CPA's responsibilities?
CPAs acquire a skill set that builds on accounting skills and enhances their chances as the most highly qualified and knowledgeable of all accountants. CPAs must be capable in the following areas, regardless of where they work:
CPAs frequently lead or work in groups of accountants. They can delegate responsibilities and assist others in solving challenges.
Legal representation before the Internal Revenue Service
A CPA can represent you in front of the IRS in the event of an audit, thanks to their comprehensive knowledge of tax rules and what you can and cannot legitimately deduct. While an accountant may draft your company's tax return, only a CPA can defend it if the IRS or state tax authorities have questions or issues.
If you are ever audited by the IRS or your state tax authorities, don't underestimate the importance of this.
CPAs perform the majority of audits, while accountants can also perform in-house audits. External audits or auditing of public corporations, on the other hand, are always handled by a CPA.
CPA Licensure Requirements
To become a CPA, you must meet three E's. Education (four years of accounting education), Exam (Uniform CPA Examination), and Experience (varies depending on the state).
The regulations and rules for each state are determined by the board of accountancy, so be sure to check your state's standards.
All Certified Public Accountants, on the other hand, must complete 150 credits of academic coursework at the undergraduate or master's level, as well as pass the four-part Uniform CPA exam.
Is a CPA or an Accountant better?
While an accountant may be able to meet your basic needs, the government considers a CPA as a credible accounting specialist who is better suited to conduct accounting obligations than an accountant.
Which is best depends on your priorities, time constraints, and budget. You will follow worldwide laws, principles, and standards if you pick CPA. Passing the CPA exam is more challenging than passing any other accounting credential.
With the help of an accountant, many small firms can effectively manage their financial operations. A CPA, on the other hand, may help you with financial statement analysis, internal and external auditing, and tax planning, among other things.