One reason why a business's financial growth gets stunted is because of the lack of financial insight the owners of the business have. But, hiring a Professional Accountant will add the layer of knowledge it will take to grow your business in the most effective manner possible.
The truth is, without someone that has the credentials in accounting, managing the financial information, you are flying blind as to how to improve the overall business performance.
Accounting Definition
Accountancy is a field of practice that involves the management, recognition, measurement, preparation, analysis, and disclosure of true financial and applicable non-financial information. It also consists of the auditing of and provision of assurance and advisory services on the financial information. Whew, that was a mouth full.
And...this information facilitates internal and external decision makers, stakeholders, and regulators in assisting with making resource allocations, investments, and financial decisions.
The Accounting field of study has a wide range of focus, including financial accounting and reporting, auditing, finance, control systems, wealth management, taxation, strategic planning, business and financial advice, risk management and overall business processes.
Simply put, Accounting is the process of recording financial transactions pertaining to a business with an end goal of analyzing the data to help owners make the best business decisions possible.
Let's look at the difference between a Professional Accountant and a CPA (Certified Public Accountant) as this topic tends to create a lot of confusion.
Professional Accountant
A Professional Accountant has earned a Bachelor's Degree in Accounting and has also demonstrated a high level of professional expertise in the field of Accountancy, through education, professional experience, and assessment.
They also accumulate professional knowledge through continuing education, act in the public interests, adheres to a strick Code of Ethics, and are subject to governance by regulatory organizations.
Professional Accountants will use various accounting talents to differientiate themselves and are separated by their roles, responsibilities, professional experience, and the types of accounting services they provide. Point is, there are many different types of Professional Accountants that can be very useful to a business.
Certified Public Accountant
A Certified Public Accoutant's experience encompasses everything above, but can do a few things that a Professional Accountant can't do. CPAs have the authoritiy to judge, in a public manner, the financial statements of an entity and signs the tax returns of companies.
By definition, a CPA is an Accountant who has had the required training, testing, experience and receives a CPA licensure through a State Board of Accountancy.
The main difference between a Professional Accountant and a CPA is the scope of work that a CPA can do. Tax preparation and filing, tax planning, financial reporting, or working as an Accountant for a publicly traded company are some of their primary functions.
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CPAs also conduct audits where they evaluate a business’s information trails and overall financial statements.
With their public certification, they are able to "sign off" on a set of financial statements and tax returns, and are used extensively in the world of public companies.
Why Hire a Professional Accountant?
Many business owners get confused as to whether or not they need a CPA as their Accountant. The answer is a definite no!
CPAs have a wealth of opportunities in the Public Accounting realm. The CPA designation is very important when looking at the auditing of publicly traded companies or verifying a tax return with their signature. But, when it comes down to it, a Professional Accountant can bring just as much value, if not more, than a CPA can in your business.
From a Chief Financial Officer (CFO) perspective, many times CPAs can get caught up in the technical side of accounting and may not have developed the interpersonal skills needed in a CFO position.
Either way, whether it be a CPA or Professional Accountant, there are many great Accountants that can help your business move in the direction you want it to, just know that you don't have to pay for the CPA designation if you are not a large public company.
Furthermore, Certified Publich Accountant services can always be outsourced when needed so do yourself a favor and hire a Professional Accountant!
Blue Collar CFO