All businesses regardless how small or big need a tax and financial advisor. However, you just don’t need an accountant rather a Certified Public Accountant (CPA) like Maria Cenisa Belardo Paterno who will get the job done with unmatched precision.
Accountant versus CPA Dillema
Primarily, an accountant is a term that refers to a tax and financial professional that follows certain protocols such as the Generally Accepted Accounting Principles (GAAP), specified by the Financial Accounting Standards Board (FASB). CPAs are those accountants who have cleared a licensing exam in the state. Thereby, a CPA is an accountant, but all accountants are not CPA.
Majority of the small businesses hire an accountant for their day to day financial needs. For basic needs, you can rely on a junior level accountant, but there are certain circumstances where using a reliable company like MCP has its advantages.
Licensure
A CPS professional is licensed by the state and must adhere to local taxation laws to maintain a license. Accountants on the other hand are not licensed. The CPA exam is considered to be a tedious one spanning over multiple days covering a variety of financial and tax facets. Once they are licensed, a CPA certified professional is required to comply with the ongoing educational requirements to maintain their license. This is not a requirement for accountants whatsoever.
Taxation Laws
CPAs are generally not specialized in small business taxes, but all CPAs are familiar with the tax laws in contrast to accountants. All CPAs have in depth knowledge of the tax code due to the curriculum of the licensing exam. Moreover, they are also required to take courses on regular intervals to remain abreast with the Tax Code. An accounts may have the ability to prepare and sign tax returns, but the designation itself does not certify his/her credibility. Furthermore, they cannot represent you in front of the IRS even if they have signed the tax return.
Accountants are considered by the IRS as "unenrolled preparers."
It is required by the IRS to have a preparer tax identification number for all tax preparers, where they distinguish between the preparers as CPAs, agents, attorneys and unenrolled preparers. Accountants unfortunately fall under the last category, where their ability to represent a client for a tax matter is fairly limited.
Financial Analysis
A bookkeeper is responsible to perform routine task to input records. An accountant then has to review the input and then analyze and prepare the financial reports. A CPA can do a detailed and in-depth analysis and offer concrete advices on financial and tax matter. While the certification of a CPA does not essentially mean that they will give you the best financial advices, but it rather means that they are well versed and are putting their license at stake when giving financial advices.
IRS Audits
This is one of the primary reasons why you need to have a CPA onboard for your business is that they can represent you in front of the IRS during an audit, while an accountant cannot do that. As discussed earlier, accounts who aren’t CPA certified can represent clients in a limited manner. Therefore, if you are paying someone for your tax preparations, make sure that person has full command and authority over the matter.
Maria Cenisa Belardo Paterno from MCP is a trusted CPA professional with more than 10 years of experience up her sleeve. With adequate command over taxation and finances, she takes pride in getting the job done with accuracy and profitability.