The Types Of Accounting

Accounting is the art of analyzing and interpreting data. It may not be apparent to some but every business and every individual uses accounting in some form. An individual may knowingly or unknowingly use accounting when he evaluates his financial information and relays the results to others. Accounting is an indispensable tool in any business, may it be small or multi-national.

The term “accounting” covers many different types of accounting on the basis of the group or groups served. The following are the types of accounting.

The Types Of Accounting

1. Private or Industrial Accounting: This type of accounting refers to accounting activity that is limited only to a single firm. A private accountant provides his skills and services to a single employer and receives salary on an employer-employee basis. The term private is applied to the accountant and the accounting service he renders. The term is used when an employer-employee type of relationship exists even though the employer is some case is a public corporation.

2. Public Accounting: Public accounting refers to the accounting service offered by a public accountant to the general public. When a practitioner-client relationship exists, the accountant is referred to as a public accountant. Public accounting is considered to be more professional than private accounting. Both certified and non certified public accountants can provide public accounting services. Certified accountants can be single practitioners or by partnership ranging in size from two to hundreds of members. The scope of these accounting firms can include local, national and international clientele.

3. Governmental Accounting: Governmental accounting refers to accounting for a branch or unit of government at any level, may it be federal, state, or local. Governmental accounting is very similar to conventional accounting methods. Both the governmental and conventional accounting methods use the double-entry system of accounting and journals and ledgers. The object of government accounting units is to give service rather than make profits. Since profit motive cannot be used as a measure of efficiency in government units, other control measures must be developed. To enhance control, special funds accounting is used. Governmental units can use the services of both private and public accountant just as any business entity.

4. Fiduciary Accounting: Fiduciary accounting lies in the notion of trust. This type of accounting is done by a trustee, administrator, executor, or anyone in a position of trust. His work is to keep the records and prepares the reports. This may be authorized by or under the jurisdiction of a court of law. The fiduciary accountant should seek out and control all property subject to the estate or trust. The concept of proprietorship that is common in the usual types of accounting is non-existent or greatly modified in fiduciary accounting.

5. National Income Accounting: National income accounting uses the economic or social concept in establishing accounting rather than the usual business entity concept. The national income accounting is responsible in providing the public an estimate of the nation’s annual purchasing power. The GNP or the gross national product is a related term, which refers to the total market value of all the goods and services produced by a country within a given period of time, usually a calendar year.

What You Would Like to Know About CPAs?

What You Would Like to Know About CPAs?

Just because you have a degree in accountancy doesn’t mean that you’re already a certified public accountant. In order to become a CPA, you must pass a licensure exam administered by the American Institute of CPAs as well as examinations handed out by the state where you want to practice. That means if you want to be called a CPA on another state, you’ll need to take another exam. You will also need to have enough experience as an accountant in order pass certification.

What You Would Like to Know About CPAs?

Some people who may pass the exam but do not have the required on-job experience are tagged as “CPA inactive” which means that they cannot practice their profession as a certified public accountant. Also, in order to retain your license, you must take at least 120 hours of continuing education every 3 years. Because of the rigorous process for the attainment of a CPA license, many accountancy graduates never become CPAs – they may perform a variety of accountancy roles but they are unable to perform specific tasks assigned to a CPA.

The main function of a certified public accountant is to provide public auditing services. Also referred to as attestation services and financial audit services, the CPA has to “attest” to the accuracy of a financial statement, and determine whether it meets the standard principles in accounting (or GAAP).

Despite the term “public” in the designation, a CPA can be employed by a private corporation to perform function in the financial department. Some of the positions that a CPA can handle includes that of a finance manager, a chief financial officer or even as chief executive officer. For many CPAs, one of the best offices to work for is the Federal Bureau of Investigation because of the attractive pay and benefits. Regardless of the role they are assigned to, in the corporate setting, CPAs are expected to do research so as to find different methods to help the company save on their costs. They may be required to develop financial plans in order to make the corporation to become attractive to foreign and local investors.

The benefit of becoming a certified public accountant is that you can perform in almost any area of the finance industry. You can serve as a business consultant – one who performs financial analysis and planning. You may be hired to detect and investigate financial frauds in the corporate setting. You may prepare income tax for small to medium industries or you can do all of these functions if you wish.

If there’s disadvantage in becoming a CPA Sacramento and another city, it’s the fact that practitioners have to pass different state requirements in order to offer their services on another state. Despite the electronic age, practice mobility is still a problem especially since each state has its own rules, regulations and requirements concerning certification. While several groups are already making moves towards an inter-state practice, several states are still hesitant. The good thing is that there are already some states which grant temporary practicing rights to an out-of-state CPA the number of places offering such benefit is still limited.

Really priority of CPA

I wish I had a nickel for every time someone asked me what the difference is between CPAs and non-certified accountants. Essentially, non-certified accountants can simply hang up their shingle and open their doors for business. There are no educational requirements. If they want to prepare taxes, most states require a certain number of qualified hours of study plus continuing education hours each year.

By contrast, CPAs have usually majored in accounting in college; sat for CPA exams covering theory, practice, auditing, and law; worked for an established accounting firm for two years; and, acquired five hundred hours of auditing time to earn their certification. In addition, they are required to complete a certain number of hours of continuing education to maintain their license.

Whoa! Why is it that one individual has to go through rigorous testing and on-the-job training to become certified to practice accounting and another can practice accounting without any formal training? It has to do with the concept of “free enterprise”. Remember the old adage, “Caveat Emptor”? It means, “Let the buyer beware”. In other words, it is the buyer’s responsibility to choose a qualified professional.

 

Really Priority Of CPA

But, there are some legal restrictions that define the range of services that can be performed for certified and non-certified accountants. For instance, there are three main types of financial statements that can be prepared by accountants: (1) audited, (2) reviewed, (3) compiled.

Only a CPA can prepare an audited financial statement. This process requires the CPA to methodically examine and test the financial records of a company. A report is then issued by the auditing accountants stating whether they found the information contained in the financial statements to be presented fairly, in all material respects.

In addition, only a CPA can prepare a reviewed financial statement. The review process is less involved than an audit but some testing is done to verify information. The CPA issues a report describing the scope of the review, its limitations, and findings.

Both CPAs and non-certified accountants, including bookkeepers, can prepare compiled financial statements. A report is issued with compiled statements indicating that no auditing or review methods were used and that the financial statements were compiled using information provided by management.

This means that, if you want to have your financial statements audited or reviewed, you must have a CPA perform that work and our work at Sacramento accounting firms. Obviously, those services cost more than a compiled financial statement. Your circumstances may dictate a need for such services. For example, it may be a requirement for a bank loan to have your financial statements audited. Or, other partners or stockholders may insist that the books be audited or reviewed in order for them to feel secure in their investment. Usually, these are businesses that have a substantial net worth. Most small businesses will never need to have their financial statements audited or reviewed.

Market conditions have brought on the use of non-certified accountants because, characteristically, CPAs charge more for their services than non-certified accountants and bookkeepers. CPAs are also bound to follow precise standards when preparing financial statements, driving their costs higher. They have to conform because the State Board of Accountancy (regulatory agency that issues the certificates) periodically reviews their work and, if certain procedures are not followed, the practitioner’s license could be put in jeopardy. At the same time, many small businesses have limited funds, so naturally seek ways to save on accounting fees. Many small business owners do their own books during the year. They then try to get a financial statement prepared as quickly and inexpensively as possible by a professional at the end of the year in order to file their tax returns.

A non-certified accountant can prepare a simple financial statement that amply provides the information necessary to file a tax return. This is not to say that non-certified accountants will use any information that is given to them. At minimum, deposits and cash disbursement information should be verified by a bank reconciliation. A good accountant will question the client for some kind of documentation if the figures seem unreasonable. In most cases, banks accept a compiled financial statement, prepared by an outside accountant, whether a CPA or not.

This has created the so called “turf battles” in some states between CPAs and non-certified accountants. These battles have been fought all the way to the states’ supreme courts. Usually the issue involved is the use of “commercial free speech”. This is because some CPAs don’t want non-CPAs to be able to call themselves “accountants”. In some cases, they don’t want non-CPAs to be able to even use the word “accounting”. In Maryland, CPAs lost the battle. In California, a compromise was reached whereby non-CPAs are required to disclose that they are non-certified on any literature where they refer to themselves as an “accountant”. Bookkeepers are unaffected because it is understood that a bookkeeper is not a CPA.

In California, there are approximately 20,000 non-certified, independent accountants. They like to call themselves “independent” because they are free from the restrictions of the state boards and the American Institute of Certified Public Accountants (AICPA). Most of these 20,000 people also prepare income taxes.
The bottom line is that in all professions one finds individuals who provide varying degrees of quality work. All lawyers must past the bar examination. That doesn’t guarantee they will be good lawyers. It is no different with CPAs. There are good ones and bad ones. There are expert CPAs and inexperienced CPAs. Obviously, it is the same for non-certified accountants and bookkeepers. It is simply a matter of human nature.
Kencone achieved CPA Sacramento.

Visit the website to biets http://kencone.com more details

 

Some accounting procedures

Accounting services are considered to be the domain which requires 100% accuracy for the simple reason that the accounts of any business cannot afford any discrepancy in the amounts or entries and totals. An accounts payable is what the business needs to pay and an accounts receivable is business revenue. It is simply not affordable to let any of these suffer from any sort of loopholes.

However, before getting into the details of various accounting processes it is important to understand the various types of accounting processes existent in any business.

 

some-accounting-procedures

Accounting processes can broadly be classified into the following types:

  • Revenue Processes
  • Disbursement Processes
  • General Accounting and Bookkeeping Processes
  • Fixed Asset and Capital Accounting Processes
  • Cost and Inventory Accounting Processes
  • Financial reporting and analysis
  • Let us examine all these categories in brief and then probably in this article or in another we will try to look at the sub – classification of these categories.

Revenue Processes –

Revenue processes, as their name indicates are related to revenue. They are specifically related to inflow of money in the business. Accounts receivables, sales orders and customer invoicing – all fall within this range. In other words, revenue processes are about money that is to be earned.

Disbursement Processes –

On the other hand, disbursement processes are related to expenses. These can be related to various kinds of disbursements or payments like – Accounts payable, travel and entertainment expenses (within the organization), cash disbursement processes, or processing the documents related to the letter of credit. In other words, these are all processes related to outflow of money.

General Accounting and Book-keeping Processes

General accounting and book-keeping processes are about maintaining overall ledger accounts. This also means that the book – keepers ensure accuracy of timely entries and regularly take care of updating accounts chats. This process also includes generating trial balances and closing accounts as and when required. Further bank reconciliations and account reconciliations along with preparation of financial statements like balance sheets, income statement and cash – flow statements etc. are also taken care of in general accounting and book – keeping.

Fixed Asset and Capital Accounting Processes

These process are meant for businesses to maintain depreciation tables and schedules, maintain the accounts that are a work – in – progress as well as the account for write – offs and valuation adjustments. They also take care of reconciling the ledger entries with fixed asset accounts.

Cost and Inventory Accounting Processes

In cost and inventory accounting, the accountants take care of developing and updating costs, maintaining inventory records and performing variance analysis.

Financial Reporting and Analysis

While I have tried to cover as many accounting processes as possible, one always needs to remember that finance and accounting aren’t two disconnected branches of business. In fact finance strategy and financial research and analysis eventually depends on the accuracy of the accounting operations. So, another process that is covered in accounting services is financial reporting and analysis.

This primarily includes:

Financial analysis like break – even analysis, ratio analysis, IRR and NPV analysis
Preparation of annual, quarterly and monthly financial management reports
In some situations, formulation of business plans is also done by the same professionals.
Financial modeling – which includes preparation of income statements, balance sheet projections and cash flow models etc.
Accounting and finance is a segment of any business that is pivotal to accurate planning, strategy and capital flow management. In other words, it is pivotal because money matters. We are Kencone – Sacramento accounting firms have worked with many clients and have experience in this field.

Http://kencone.com visit our website to learn more about us

Accounting Are Meant To Help You

Are you worried about meeting client demand during the approaching tax session? Do you have a lot of pending work related to the management of your accounts? It all the more happens during the tax session that accounting firms have excess of workload. They are required to handle the management of balance sheets, profit and loss account, generating invoices or any other accounting work, so that things are updated at the time of tax submission. During the excess of workload, accounting can prove to be highly beneficial in terms of managing.

 

Accounting Are Meant To Help You

Basically, accounting services aims at freeing you from the worries of appropriate tallying of the accounts. In the case of overload of work, it happens that the accounting firms may miss out some expense or the other to include in the accounts. These minor neglects can turn out to be huge problems in future for the accounting firms. In order to save your accounting firm from this problem, you can take the help of accounting services.

We will be completely concentrating on your work, so that the work at the right time. From checking your expenses to totaling them and making ledgers, accounting outsourcing services deals with everything. With the help of these services, you can pay attention to other fields of your business. It may happen that the other aspect of your business needs more attention, as they are directly related to the up gradation of your business. Accounting help you do this without any difficulty.

The tax session is very crucial. During this particular time, every accounting firm wants that they be in a position to help all their customers prepares their tax returns in time. Accounting come with various benefits. One of them is that such firms help you to save a lot of your valuable time. At the time of the overload of work, you waste the entire time in sorting out the daily expenses. In this case, other things are left unnoticed. The outsourcing firms create a place for your accounting firms to breathe in. Apart from this, you don’t have to waste time in checking every bill to be included in the accounts.

If you look at the amount spent on the in-house handling of this matter, it can rise to a boiling point. Accounting will help you to save your precious dollars. Your accounting firm has to bear the expenses of their service only. In this way, accounting proves to be a boon for your accounting firm in terms of work efficiency and its quick completion.

Kencone has CPA Sacramento is a director of corporate Kencone. He specializes in Account .To know more and to use the services visit http://kencone.com

When will businesses should review their accountants

You are not in top 20% of the clients?
Most accountants and accounting practices use Pareto’s 20:80 Rule which means that e.g. 80% of income for the practice is coming from 20% of the total clients. Further this principle requires discrimination in the treatment between the clients in order for profitability for the practice to be increased. If you think and fell that you are not in the top 20% clients that there is a great chance that you may get a better service elsewhere.

 

When will businesses should review their accountants

There are some serious communication problems
You see your accountant only once a year, your accountant is not responding to your calls, emails and letters could be a definite sign to look for a new accountant. In addition you do not feel any connection to your accountant as he/she is talking numbers only and is not interested about your new business ideas.

Unfair accounting fees and charges
No accountant who has a long term view to keep client happy should charge for e.g. sending a fax email or letter or for talking with a client for 15min on the phone regardless of his or her expertise. A real bad example here would be where an accountant is charging you for fixing a job where he/she made a mistake. Any increase in accounting fees should be justified e.g. increased quality and quantity of accounting services so if charges go up every year always ask for explanation.

Your accountant does not tell you about your options
Always ask about your possible options about e.g. your taxation planning strategies and if you have only one option this could mean that your only other choice is to find another accountant. The point is that your accountant may not be familiar about your circumstances and your business as he/she is delegating your work to the junior staff. There are always some other options and even the worst case scenarios should be presented to you by your accountant.

There is no comparative reporting
Provided financial reports should be compared with e.g. last year results, competitors or your industry average otherwise reports provided are meaningless. Also your accountant should investigate and explain any differences between projected figures and the actual.

Your accountant cannot keep up with your business expansion and changes
Another reason why you should think of changing your accountant is if your business has grown and your current accountant has no experience in dealing with current accounting issues especially if your business is going to be reporting entity or listed on ASX. Ask your accountant what tax and other strategies and changes he is going to implement for you in order to keep up with your growing business and if you are not happy with the answer you know what to do next: Take Yellow Pages and look under section ‘Accountants’.

There is high staff turnover and jobs are not on time
If there is frequent change in staff in your accountants office this may be an indicator of problems inside the organisation especially if your accounting work is not on time or even worse you receive a fine for late lodgment from the Tax Office.

Your accountant does not have any kind of loyalty rewards
If you are a long term client with your accountant ant you do not receive any kind of rewards in e.g. additional services, free services or even a simple car would do this means that your accountant does not have such system implemented or does not care about long term relationship with your business.

Did you learn anything from your accountant?
One of duties of an accountant is to teach and facilitate their clients in the process of developing your business and if this is not happening than your business development may be in question.

You end up with a high tax bill at the end of the year
This simply means that your accountant has not been monitoring your business progress and has not implemented any tax planning during the year and any provisions for PAYG has not been made. It is always easier to pay your tax during the year in 3-4 installments than to pay one lump sum. This often could be a reason for a business failure as payment of one lump sum can significantly influence business cash flows.

Trust your intuition
It there are some other indicators that you are not getting what you are paying for your should try to compare your accounting services with some other accountants services before your make your decision.

Congratulations! Your business is selected for the audit by the Tax Office
If your business is audited by the Tax Office than this may be indicative that there is something wrong with your accountants procedures and policies. Ask for a second opinion.

If anything from above implies in your case you should clarify the issues with your accountant first and if you are still not happy with the explanation do not be afraid to ‘divorce’ from your accountant as this may be the best thing you have done for your business ever.

Come to Kencone – Sacramento Accounting Firms. We have many years experience, reputation can bring in steady revenue profits of the company.

Http://kencone.com access to more information

What Are Compiled Financial Statements?

All organizations, whether private, public, or non-profit, need to prepare financial statements on their performance to provide fiscal accountability and accuracy to their stakeholders and people with an interest in the company. These statements enable management to make business decisions, enable creditors to evaluate loan applications, and provide individuals with information to make investment decisions.

What Are Compiled Financial Statements?

Financial statements provide information from an organization’s accounting documents about their economic resources and obligations on a specific date, as well as their financial activities over a period of time. These statements are usually prepared in accordance with Generally Accepted Accounting Principles (GAAP), which are the standards issued by the American Institute of Certified Public Accountants (AICPA), but they may also be prepared on other comprehensive basis of accounting, such as cash basis or tax basis, depending on the needs of the users.

Compiled financial statements offer lowest level of assurance. One of the main reasons these are used in lieu of other statements is for the timely release of financial information about an organization. Compiled statements are a presentation of various financial reports and documentation, which is the representation of management or owners of an organization. Compilation standards allow the organization to omit note disclosures as long as there is no intent to mislead the users. This is the only type of financial statement that allows omitted disclosures.

An accountant will compile the information supplied by the client into a proper financial presentation. This is the only financial statement that a non-certified accountant can prepare. The accountant will read the statements and issue a report. If the organization has elected to omit any disclosures, this must be included in the accountant’s report of the financial statements, as well as if the disclosures had been included; they might have influenced the user’s conclusions.

The accountant preparing the compiled financial statements are not required to verify or confirm the records and do not need to analyze the statements for accuracy. However, an accountant engaged to compile financial statements is required to obtain a general understanding of the organization’s business transactions, its accounting records, qualifications of their accounting personnel, the accounting basis on which the financial statements are presented, and the form and content of the financial statements. If any obvious material misstatements or missing information is noted, the accountant must discuss these items with the organization’s management for clarification or adjustment to the statements, or withdraw from the engagement if management refuses to provide additional or revised information.

In compiled financial statements, the organization, not the accountant, is responsible for the accuracy and completeness of the financial documents. Since the statements were not audited or reviewed, they are not certified by a Certified Public Accountant (CPA).

No opinion or assurance is expressed in the report as to whether the compiled statements are free of material misstatements or false/missing information or if they are found to be accurate, complete and fairly presented to meet the requirements of the US GAAP (Generally Accepted Accounting Principles).

Kencone is the CPA about audited financial statements as well as all services provided by a Certified Public Accountant Sacramento.

Business experience as finance and accounting recruitment

A key ingredient in the success of your business is to find a good accountant who provides pertinent, timely and cost effective advice, and whom you can communicate with effectively. For example, they can recommend you the right small business accounting software that fits your small business needs.

Accounting firms come in all shapes and sizes.

Kencone is Sacramento accounting firms providing quality accounting services, professional. The second tier firms generally are international firms as well with the same name throughout the world, and while they might not be as large as the tier 1 firms, they also prefer to work for businesses of a reasonable size. The next tier firms are likely to have several partners and generally have a national and sometimes an international affiliation. They tend to work a lot more with small businesses. Finally there are smaller firms with one, two or maybe three partners who generally specialise in small business or people who earn salaries and wages.

When selecting an accountant, you are looking for someone who specialises in your size of business, has some experience in your industry and who gives timely, pro-active and useful advice at a fair and reasonable cost. It is also someone who shows they care for you and your business and who you feel you can build a longer term relationship with – someone you are comfortable with and can come to trust.

You need, therefore, to put some effort into selecting the right person and firm.

Step 1: List What You Need from an Ideal Accountant

What do you want from your accountant?

Is it just to complete your annual accounts and tax returns – or are there other matters that are important to you?

To help you in that task we have attached a list of many of the services that accounting firms may offer. Refer to the list to ensure you do not overlook an important service that you will require from your accountant.

Make a list of the services that you think you might want from your prospective accountant. This way you can draft some questions that are relevant and pertinent to your specific needs.

Step 2: Lookout for the Credentials of Certified Public Accountants

Make a list of say 4 or 5 firms.

Check their web sites – how informative are they? Do they seem to provide services for a small business like yours? If they have no web site – ask yourself – how progressive and up to date are they likely to be?

Are the principal(s) qualified? Do they belong to one of the main accounting professional bodies – Chartered Accountants (CA), Certified Practising Accountants (CPA) or National Institute of Accountants (NIA)? A member of one of the 3 main accounting organisations must complete a minimum number of annual Professional Development hours keep themselves up to date.

Step 3: Evaluate the Reputation of a Good Accountant

Ring each of them (or reduce the number to 2 or 3 firms) and ask to meet with a person who might be able to help you, or speak to them immediately if they are available. Explain who you are and ask if they can offer their services to a business such as yours, and whether you can you meet to discuss those services and costs. This meeting should be at no cost to you and be, perhaps, about an hour in length.

Assess your experience with them so far – how were you greeted by the receptionist and the accountant – if you spoke to one at that point? Were they pleased to talk to you, friendly and helpful?

Step 4: Discover your Needs with the Accountant by Asking Specific Questions

Make a list of your questions.

Use the following as guide only – add or subtract anything that you want to ask of the accountant you are going to meet.

1. Do they handle small business clients?
2. Explain your business and your current situation and plans for the future.
3. Ask for examples of a few identical or similar businesses to yours and ask what they have done to help them – especially businesses of your size and stage of development. Ask about, say, financing the buying of Plant and Equipment, or how they might assess whether those businesses should be sole traders, a partnership, company or a trust? Are they able to explain to you why such a structure was right – and (briefly) how that might apply to you? Can they give examples of how they have improved the profitability of some of their clients’ businesses, or, can they set up a record keeping program that fits your needs.
4. Can they give examples of where they have been pro-active with their small business clients – say end of year tax planning, superannuation planning, business improvement planning, newsletters, client seminars, sending business or tax articles to clients…?
5. What is their response time policy – to questions and queries from business clients like you?
6. What other services do they offer (web site should give you some leads here)?
– Superannuation returns and planning?
– Business planning and profit improvement?
– IT assistance
– Do they have a strong network of referrals to lawyers, bankers, financial planners, etc
7. How do they operate? Meaning – who is that you are likely to talk to if you have a simple processing problem? What about if you have a more complex problem? Who do you deal with and how will they process your end of year tax and accounting work?
8. What are their fees likely to be? What are their charge out rates? Do they offer a fixed annual fee for end of year tax work? This should be a “value” question for you rather than just a cost question – especially in regard to planning and problem solving work.
9. Will they travel to your business premises if you want them to? Will they charge for the travelling time?
10. Ask – “why should you use your firm?” This will test them as to whether they have been listening to you and can tailor their response to answer any queries or issues you have raised during your meeting.

Step 5: Do a Reflection on your Face to Face Meeting Experience with your Accountants

How did the meeting go?

Did you feel comfortable with the people that you met?

Did they show a genuine interest in you and our business?

Did they demonstrate that they understood your business (at least to some extent)?

 

Business experience as finance and accounting recruitment

Did they show initiative in answering some answers of your questions – or discuss or raise some issues that you did not ask questions on? In other words did they show they might really understand your business and how to give you useful advice?

Are their costs likely to be acceptable? Costs are always an issue – but if you are getting good timely advice that is helping you to grow your business and/or saving you business costs and keeping your taxes to a minimum – then you are probably getting value for your money. Remember – if you want more it will cost more, and, good advice rarely comes cheap.
. He realized that small business owners want to keep proper accounting records but fail to do so. As such, non-accounting users who are left without an alternative either pay a lot for accounting software training or end up struggling to understand how to use their accounting software effectively. Therefore, Cashflow Manager software was designed specifically for small business non-accountants consisting of self-employed, home-based and micro business owners with no bookkeeping training and those who knows nothing about accounting. Kencone developed this simple, step by step small business accounting system to help his clients keep better records and found that this was the major breakthrough for his clients. And of course, excellent records from his clients meant less time on what accountants call ‘compliance work’ and more time for helping clients improve their business.

Kencone CPA graduated in the financial sector – accounting. You can follow Kencone at http://kencone.com

Why hire a CPA

A certified public accountant (CPA) is a professional individual who works on their own or is a part of an accounting firm. A certified public accountant (CPA) is generally in charge of monitoring and keeping track of the financial records of an individual or business. Each year millions of Americans wonder if they should hire an certified public accountant (CPA). Why hire a CPA is a question that many individuals ask themselves.

There are many individuals and business owners who are not organized. Being unorganized can make it virtually impossible for an individual or business owner to accurately keep track of all of their finances. This is why many individuals make the decision to hire a certified public accountant (CPA). Another reason why many individuals or business owners may hire a certified public accountant (CPA) is because they do not have enough time to keep track of financial records on their own. Another reason is because the majority of certified public accountants (CPAs) are trained and experienced professionals.

 

Why hire a CPA

To become a certified public accountant CPA (CPA Sacramento…) individuals need to meet certain requirements that are imposed by the American Institute of Certified Public Accountants (AICPA). These qualifications typically include around one hundred and fifty college hours that are applied towards an accounting program. A certified public accountant (CPA) also is required to pass a CPA exam that is developed by the American Institute of Certified Public Accountants (AICPA). There are some states that require an individual be certified or have a particular amount of work experience before operating an accounting business; however, not all states have these requirements. With all of the training and experience that a certified public account must have it is evident that they are more experienced in the flied of accounting. Although it is not guaranteed a certified public accountant (CPA) is likely to produce better results than a traditional accountant.

A large number of individuals hire the services of an accountant all year round to make sure that their finances are in order. Although most accountants are hired on a long-term basis there are accountants that are only hired to professionally prepare tax returns. When being trained in the area of accounting a certified public accountant (CPA) also learns how to complete multiple federal and state tax returns. Why hire a CPA to do your taxes? The answer is because many certified public accountants know how to get their clients the maximize number of tax deductions and they also how know to accurately organize receipts and other document verifications for those tax deductions.

When hiring a certified public account (CPA) many individuals or business owners are encouraged to determine the amount of experience or qualifications that an accountant has. When searching for a certified public accountant many individuals and business owners prefer to work with a local accountant. Many individuals feel that working with an local accountant is easier should something unexpected arise; however, there are many accountants that work for a successful accounting firm or operate their own personal accounting business nationwide. Each individual or business owner will have to make their own decision as to which type of certified personal accountant (CPA) they wish to hire.

Why hire a CPA? The answer is simple because it is an easy to way to have your financial records in order or your tax returns professionally completed. The majority of certified public accountants guarantee their work; therefore, there really isn’t any reason why a certified public accountant (CPA) should not be hired. Instead of spending hours reviewing and sorting through your finances you should pick up your local phone or use the internet to at least schedule a consultation appointment with a certified public accountant (CPA) to see if hiring one is right for you and your situation.
To learn more about CPAs, visit http://kencone.com and to learn more about tax preparation.

Accounting Professionals: Are The Necessary?

Does your business needs an outside accountant?

It all depends. If you require an audited or reviewed financial statement, then, yes, you need a CPA. In any event, it is always a good idea to maintain a relationship with an accountant no matter how small your business. Whether your accountant is a CPA is up to you. The real question is: To what extent do you need outside accounting services? That also depends on you and the nature of your business.

I always start with the admonition: The Buck Stops With You! You cannot afford to dissociate yourself from understanding the meaning of your financial statements. If you solely rely on your accounting staff or accountant for completely accurate financial data, then you are asking for trouble. If you are going to own or manage a business, then you have a responsibility to learn how to speak the language of business. The language of business is accounting knowledge.

How involved you become in the accounting process will be determined by time schedules, your mental pre-disposition, desire for control, cash flow, etc. One scenario, if you can afford it, is to hire an internal accounting staff to prepare financial statements on a monthly basis and have an external accountant check them over. Another common scenario is to prepare part of the compilation yourself, such as preparing a sales journal and a cash disbursements journal, and then hire an outside accountant to prepare a bank reconciliation and the financial statements for you. Some do this on a monthly basis, others quarterly. Some business owners do the books themselves all year and turn them over to the accountant at the end of the year to verify the balances and do the depreciation entry for tax purposes.

Accounting Professionals: Are The Necessary?

There are numerous ways to work with an accountant. Regardless, you should learn enough about accounting to be able to communicate intelligently with your accountant. Since you are intimately involved in your business you may recognize danger signals that not even your accountant will see.

Selecting an accountant

Relying on the yellow pages to find an accountant can be risky. The best way to find any professional is by a referral. However, you need to interview prospective accountants before signing on. One of the first priorities is to find out what their experience level is. Your business may have very specific accounting and tax issues that require a certain amount of expertise. Perhaps you have a manufacturing concern. What does the accountant know about raw materials, work-in-process, and finished goods inventory accounting? Does the accountant know how to set up job-costing and overhead burdens? Ask for references from other like-kind businesses.

Keep in mind, that you may go to an established firm with a good reputation, but with whom are you going to have a relationship? Is your account large enough to warrant a relationship with a partner? You need to feel confident with the person assigned to your account. Perhaps a smaller firm with four or five accountants who are all seasoned veterans might work better.

You will also want someone with whom you can relate. The ability to communicate is a crucial factor. Your accountant may be technically proficient but can you understand what he or she is telling you? Does he or she listen when you ask questions? Don’t be afraid to ask for someone else if you are having difficulty communicating.

Another important criterion is “accessibility”. Is your accountant too busy to talk to you? Can you get your questions answered within a reasonable period of time? Do you feel important to him or her? Situations may arise where you need information immediately to make an important business or tax decision, will your accountant respond quickly?

Last, but not least, are the accountant’s billing practices. Billing practices vary from firm to firm. Some firms are very aggressive and put tremendous pressure on staff and partners to bill every minute they can. Some firms require a review process before any work goes out the door. This means that every person who performs any work on your account, including the person who puts the stamp on your envelope, bills you for it.

Find out in advance what happens if you call the firm to ask a simple question that takes less than five minutes to answer. Are you billed for five minutes or are you billed in increments of fifteen minutes even though you only talked for five? Some firms justify this increment billing by explaining that you are paying for the accountant’s expertise that may have taken years to acquire, therefore, they say, it’s worth it.

Some accounting practitioners charge a flat rate for services rendered or a combination of flat services and hourly charges. For instance, an accountant might charge $200 a month to prepare a monthly financial statement but charge $100 an hour for special projects. Within the monthly fee, the client can call to ask questions that last fifteen minutes or less for no additional charge. This way the client is not reticent about calling. Getting your question answered may prevent little problems from later becoming bigger more expensive problems.

Very often projects take longer to complete than anticipated. Complications arise and the practitioner should be paid for his or her work. Always insist that, if there are going to be additional charges over and above what has been agreed upon, that the accountant gets your approval first. Be sure to clarify these procedures before engaging an accountant in an “engagement letter”. This is a document that spells out the responsibilities of both parties and how the relationship is going to work.

Remember, there is absolutely no reason to be intimidated by your accountant. After all, you are paying for the services, and I promise you, the accountant wants your business.