Accountants: Are There Differences Between CPA Firms and Accounting Firms?

Whether you’re a business owner or an individual taxpayer, having an experienced, knowledgeable accountant available for tax return help or dealing with IRS tax problems is vitally important. It can mean the difference between avoiding major tax problems and getting buried by them. However, it’s critical to make sure you know who you’re turning to for tax help, as not all accountants are created equal. There are major differences between CPA firms and accounting firms, so read on to learn more.

Although there are many capable accounting firms that can help you with everything from small business bookkeeping services to filing tax returns, it’s often advisable to seek out tax help from CPA firms. Depending on the complexity of your tax and financial situation, there may be some solid advantages to choosing CPA services instead of ordinary tax and accounting services. When you need an experienced tax advocate, representation at IRS audits, or help with complex tax issues, the additional training and expertise that a CPA offers can make all the difference in the resolution of your tax problems.

Surprisingly, in many states, anyone can refer to themselves as an “accountant” without having any special education, certification, or experience. That’s why it can be somewhat risky to hire an accounting company or┬átax accountant who has not taken and passed the rigorous Uniform CPA Examination. In order to be granted a CPA license by a state board of accountancy, a CPA candidate also needs to earn a college degree in accounting, gain professional work experience in public accounting, and demonstrate high ethical standards. Unlike many accounting firms, CPA firms are qualified to negotiate an IRS tax settlement, help clients obtain tax debt relief, and prepare effective offers in compromise.

With expertise in everything from business valuations and financial reporting to negotiating the release of wage garnishments and IRS tax liens, CPA firms are usually the type of tax consultants you can place the most confidence in. In addition to meticulous tax return preparation and financial planning guidance, many CPA firms can provide valuable help in securing IRS installment agreements, penalty abatement, innocent spouse relief claims, and IRS tax settlements. While there’s no blanket guarantee that all CPAs are beyond reproach, CPA certification is usually an indication that you’re receiving tax advice from a meticulous and knowledgeable professional.

If you’re among the minority of taxpayers who do not own real estate, claim tax deductions, have investment income, or ever encounter tax issues of any kind, then it might not be necessary to hire a CPA. For example, a young, single professional who does not have any dependents, assets, or deductible expenses may be able to handle his or her own income tax preparation and planning without too much difficulty. As his or her career, business, or financial situation moves forward, however, the services of a competent accounting company or tax accountant often become an essential part of financial management.

When it comes to accounting professionals, understanding the difference between a CPA firm and an accounting firm can make sure you get the services you need for your specific situation.

Websites For CPAs & Accountants To Effectively Market Accounting Services

Having worked as a practice development consultant to the accounting industry for fifteen years, I have seen dramatic changes in marketing by CPA accountants. The greatest change has been in the use of the internet and websites.

Websites have become mandatory for all Accounting firms to maintain an “up-to-date” professional image. If a CPA firm fails to maintain a Website, the public could be given a parallel perception that the firm is not “up-to-date” in understanding the laws, rules, and regulations of the business. The Accountant could easily find him or herself in an embarrassing position of explaining to a potential client why they neglected having a Website. The CPA only has one opportunity to give a first impression; it is best for it to be an “up-to-date” powerful first impression.

In addition to image, a CPA Accountant should design the Website to attract new external clients. Many Websites are designed today mostly focusing on accommodating existing clients. While this is important, it should not be the primary focus of the CPA’s Website. The Website should be developed to attract a prospective client and have him or her respond by contacting the CPA. In addition, the Website should be designed to direct potential clients via Internet search engines to the site.

The Internet has become the modern-day Interstate for the Website. When the “Interstate” was built years ago, many companies decided not to relocate their business along the Interstate. As a consequence, many companies went out of business. The companies that did relocate thrived. CPAs must relocate their marketing efforts to the Internet via their Website. The Accountant who fails to do so may compromise the future of his or her firm while firms that do have a Website will flourish and thrive.

As companies relocated during the building of the Interstate, there position along the Interstate determined much of their future success. This is also true with Accountant’s Websites. Where a CPA Accountant positions his or her firm’s Website will influence the firm’s future success. The CPA Accountant whose Website is highly visible to the Internet traffic will have much greater growth than those which lack visibility or are difficult to find. Similar to the Interstate, the Internet has very few positions with great visibility and many positions with poor visibility. Accordingly, it is extremely important to have a knowledgeable professional prepare a CPA Accountant Firm’s website who can develop it with high visibility.

In a major Metropolitan City, there maybe thousands of CPA accounting firms all competing for a few precious positions on a search engine that will provide great visibility. Imagine thousands of CPA firms all competing for a first page listing. If the CPA Accountant’s firm is adopting a template that is common to many other template Websites, his or her firm will never stand a chance. His or her firm must use a professional Website developer who will not use a common template for the website. The professional should also provide individual care to develop the CPA Accountant’s Website using techniques and strategies independent of standard key word phrases. Remember, if the CPA Accountant’s Website developer is performing the same service for you as he or she is providing for the other thousands of CPA accounting firms that are competing for the few visible positions, his or her firm will not succeed. There are many Website development companies available for accounting firms today, but the one company that stands out is “Infoworkz Solutions Group.”

Six Areas of Specialization For Managerial Accountants

Unlike a financial accountant, an accountant working with management has various areas of specializations. These areas are above and beyond those one would normally find a financial accountant performing. Some of the duties and responsibilities a financial account may perform are as follows: records, sorts, and files accounting information. The maintaining of one’s specialty in performing services covering cash management, payroll, accounts receivable, accounts payable, inventory, or purchasing transactions. Finally, the financial accountant may also be involved in a small portion of the total accounting responsibility for a firm as in relation to an accountant working with management who has a broader view of the operation and greater responsibilities.

The following are six areas of specializations one would expect a management accountant to be able to perform in an effective and efficient manner in compliance with Generally Accepted Accounting Principles (GAAP):

  1. Accounting Information System. Management accountant in this area designs and implements manual and computerized accounting systems to gather managerial information for better management practices.
  2. Financial Accounting. Based on the accounting data prepared by the financial accountant, management accountant prepares various reports and financial statements, and helps in analyzing, operating, investing, and financial decision making for management effectiveness and efficiency.
  3. Cost Accounting. The cost of producing or providing services must be measured. Further analysis is also done by an accountant working with management to determine whether the products and services are being produced in the most cost-effective manner.
  4. Budgeting. In the budgeting process, a managerial accountant helps management develops a financial plan which positively impacts profitability and improves cash flow.
  5. Tax Accounting. Instead of hiring a public accountant, a company may use its own managerial accountant. For example, one may focus on tax planning, preparation of tax returns, and dealing with the Internal Revenue Service and other governmental agencies.
  6. Internal Auditing. Internal auditors review the operating and accounting control procedures adopted by management to make sure controls are adequate and are being followed. Managerial accountant may also monitor the accuracy and timeliness of the reports provided to management and to external parties for accuracy and compliance with rules and regulations in accordance with GAAP.

© Joseph S. Spence, Sr., 9/7/09

© All Rights Reserved

Submitted by “Epulaeryu Master.”