When opening a small or large business it is a difficult task to choose the right accountant for with you and your company. Many businesses decide to go use a Certified Public Accountant, which means they had passed the Uniform CPA Examination. The benefits in using a CPA are that person possesses integrity, professionalism, and is certified by the state. If you want an accountant that is the most qualified choose a CPA. When picking a CPA it can mean the difference between success and failure. A company’s financial records are what make or break your business.
There are many places to look when trying to find prospective CPAs. The first would be to get suggestions from friends, business associates, or even your attorney. Ask owners of local businesses you frequent to see if they have any suggestions. Another way is to look in the Yellow Pages or online at <www.cpadirectory.com >. The last recommendation is to ask your local Chamber of Commerce for names of CPAs who are members.
When you have inquired a list of qualified CPAs and are ready to interview there are specific questions that you need to ask to make sure you are choosing the correct CPA. Questions could include: What kind of business advice will you offer me? What type of services they will offer for clients, including what computer programs they prefer to use? How much experience they have in the accounting practice? How do they calculate your fees? (Make sure they will guarantee not to exceed an amount agreed upon up front). The final question to be asked is what are the benefits of choosing them over another CPA? Make sure before the interview is over to ask for references and don’t forget to ask to see their CPA certificate. You should be very thorough, interview several candidates, try to establish a common ground with similar values, and check out their listening skills. Also, make sure the candidate specializes in corporate accounting and can meet all of your specific accounting needs.
Once you have chosen the right CPA you must be certain on what their duties are and how they can benefit your company. There are various services performed by CPAs, such as taxes, bookkeeping, setting up businesses to be able to keep track of records, auditing, which is when a CPA comes in and reviews how you are conducting your business, or lastly consulting, which includes advice from keeping the business alive to expanding your business. Their main abilities should be to analyze data, record, interpret, and compare it to make important business and personal decisions. Accounting involves the ability to reason, solve, and propose new ideas.
When deciding where you want to go with your company your CPA should be able to tell u how to get there. The CPA shouldn’t just show you the financial paths of where you have been, but where you will be in the future. Certain qualities and characteristics are needed to be the right CPA. They include: maintaining good relationships with clients to obtain good service, the ability to recognize needs of their clients to develop personalized strategies and consider the aspects of the client’s financial life, becoming well-experienced in the areas you need, being a good communicator, doing what they promise to do, and having a good network of associates. A perk should also be having an office location in close proximity to where your business is.
By being well educated in finding and choosing the right Certified Public Accountant it can help provide you with the necessary requirements in opening a new business. All theses tips can help with allowing your business to run smoothly and efficiently.
Preparation for CPA Exam and CIA Exam Prep requires follow up of techniques and strategies such as allocating more study time for the weak areas. It is well known fact that students love to revise and practice the lessons and areas in which they have acquired required expertise. Though it is good to acquire 100% command of the lessons in which you have only 90% command, one should not ignore weak areas for acquiring command on strong areas. Students must take special care of practicing the difficult areas which have created troubles in passing the CPA exam in the past. Students often don’t feel comfortable in practicing or studying difficult lessons and they switch over to next lesson but this should be avoided and CPA applicants must practice a difficult lesson again and again so as to acquire desired comfort level with the topic. These top tips must be followed while preparing for your CPA exam:
Make an application for the CPA exam well before the scheduled date of exam. One can get an application for CPA exam from the state board of accountancy. Studying sample papers and previous year’s solved question papers is a must while preparing for CPA exam. Think positive and have faith in your capabilities. Rigorous practicing can make you an expert of all the topics that can be in the question paper of CPA exam thereby making you confident and confidence is the key to success in any exam. Students must practice only the latest accountancy, tax and auditing lessons and must check into the new syllabus so as to buy reference books according to the new syllabus instead of wasting time and money on old syllabus, and out of date books. Keep your mind stress free as stress can lead to concentration failure and no one can succeed in CPA exam without studying with full concentration.
Students must take care of the grading process and can use CPA exam software to study so as to pass the CPA exam. One can learn tips and techniques of preparing for CPA exam by using exam review software.
If you operate a small business, you know that you need a decent, working accounting system, right?
Decent accounting means you know things like whether or not you’re making money. And such a system lets you make better decisions about the products and services you sell and which customers and employees you want to work to keep.
Unfortunately, small business accounting isn’t always easy or straightforward. Accordingly, consider these five tips to simplify your business’s bookkeeping.
Tip #1: Don’t Incorporate
Incorporation complicates your accounting. By incorporating, for example, you’ll automatically add payroll accounting to your bookkeeping duties–even if you’re the only employee.
What’s more, by incorporating, you’ll typically have to provide more information when you do your tax return than is the case if you operate as a sole proprietorship. A corporation tax return is several pages long, for example, as compared to the typical one or two page sole proprietorship tax form.
If you want to incorporate for legal reasons, by the way, you should know that you have another option for limiting your liability. You can set up a one-owner limited liability company. A one-owner business operating as a limited liability company is treated for tax accounting purposes as a sole proprietorship.
Tip #2: Don’t Depreciate
If your business is profitable or if you or your spouse have earned income from wages and you’re operating as a sole proprietorship, you may be able to use something called the Section 179 election to avoid dealing with depreciation.
Rather than go to the bookkeeping burden of allocating a $500 desk as “depreciation” expense over seven years, for example, you can use the Section 179 election to just immediately write off the entire $500 furniture cost in the year you purchase and begin using the asset.
Not all states allow Section 179, so you’ll want to confer with your tax advisor. But by simply writing off asset purchases, you greatly simplify your accounting. You don’t, for example, find yourself a few years down the road doing the depreciation calculations for, say, several dozen or several hundred items you’ve purchased. Ugh.
Note: Most assets that a small business purchases can be immediately expensed using the Section 179 election. Some assets can’t, however, including real estate.
Tip #3: Don’t Combine Business and Personal Items
Another tip for keeping your business accounting simpler: Don’t combine business and personal items. For example, setup a separate bank account for the business and use that account only for business deposits and withdrawals.
Another example… Don’t go try to buy a car, call the purchase a business expense, and then attempt to deduct a portion of the car’s price and operating expenses.
A general rule about tax accounting: Any deduction that’s been abused by taxpayers in the past is probably closely watched by the IRS and the state revenue folks. And that close monitoring almost always means that in order to take the deduction you need to go to a bunch of extra bookkeeping work. That extra bookkeeping work not only costs you time and money, the extra work also tends to truly complicate your accounting.
With a car, for example, deducting some portion of your auto expenses will require you to carefully track all of your car expenses (fuel, service, insurance, and so on) and also your business, commuting, and personal use of the vehicle. Furthermore, whenever you trade-in your “business vehicle,” you or your accountant will also probably have to do the tax accounting for a like-kind exchange.
Seriously, small businesses commonly make the mistake of deducting items like cars only to find (if they’re honest with themselves) that after all the wailing and gnashing of teeth (and perhaps a bit of dishonesty, too) the deduction saves only an extra two to three hundred dollars.
Tip: Do keep track of any business miles so you can claim the easy standard business miles deduction. That deduction, for many businesses, is an easy tax deduction.
Tip #4: Do Consider Using Cash-basis Accounting
Tax laws don’t allow all businesses to use cash-basis accounting. For example, if your business resells inventory or manufactures items, you probably can’t use cash-basis accounting.
However, service businesses typically can use cash-basis accounting. And cash-basis accounting, while a little frowned upon by accountants, should always been considered if the resulting accounting lets you prudently run your business.
Cash basis accounting simplifies your accounting because you don’t have to setup and then work with an accounts payable system. And because you don’t have to do accrual journal entries at the end of each month and year.
Note: The popular small business accounting program QuickBooks lets you do both cash-basis accounting and accrual-basis accounting.
Tip #5: Do Consider Outsourcing
A final quick tip that’s especially applicable once you have employees: You should consider outsourcing your accounting, or some part of your accounting, once you’ve got employees or too little time to do the job yourself.
And this outsourcing option is actually very simple, straightforward, and even economical as compared to the options of letting your books turn into a mess or hiring a modestly competent full-time bookkeeper.
You can typically pay a service bureau a couple of thousand dollars a year, for example, to do your payroll. And a few hundred dollars a month is often enough to pay for a general bookkeeping service.