When it comes to your business’ finances and accounting, you want to make sure that you’re in good hands. Certified public accounting firms, or CPA firms, consist of individuals with a variety of experience in their accounting and business careers. To be considered a firm, there must be at least one certified public accountant, state-licensed from the state in which the firm operates.
Services from a firm include the following:
assurance and auditing
forensic and environmental accounting
business and management consulting
tax and individual financial planning
For businesses, CPA’s are usually the initial choice when choosing how to handle finances, and there are many pros associated with them that might sway you in their favor. However, CPA firms have disadvantages that come along with working through them as well, and these disadvantages could slowly begin to outweigh any good aspects that were initially considered.
Benefits of CPA Firms
CPA firms provide convenience and accuracy for companies and their finances. This is largely the reason why businesses tend to use CPA firms rather than other options that are available. Reading through and understanding IRS form instructions, as well as keeping up with the publications and news releases, is an incredibly time-consuming project that could instead be in the hands of a certified accountant. There is also a lot of room for error during tax season, which can be minimized by hiring a tax professional rather than filing forms on your own.
Drawbacks of CPA Firms
However, there are aspects that prove just how few benefits CPA firms offer businesses, especially during busy tax seasons. For instance, the price alone is enough to make you stop and consider if a certified public accounting firm is the best option for your business. Depending on the type and number of tax forms you need filed, prices can range from $60 to $1,000 or more. Prices rise as your tax situation grows in complication, and having both federal and state tax returns will cost you more as well.
CPA’s also traditionally work with a bookkeeper, but due to the lack of middle-level staff at a CPA firm, internal controls that ensure data integrity may be missing. Not only that, but their time is greatly limited during periods such as tax season, which mean less time for you and your business when you really need them.
Are there alternatives to CPA firms?
If this sounds frustrating, don’t despair; there are other options besides going through a CPA firm. A popular solution is to outsource a business’ accounting. Many outsourced accountants provide a team of resources with varying experience levels that are dedicated to your business and its financial operations. They also are incredibly flexible, offering a large variety of services that businesses can choose from based on their needs.
Outsourced accountants are more intimate with your business’ financial details, and will work on a day-to-day basis rather than only during tax season. This means that if you need help, advice, or a tax form filed you have immediate feedback and results, no unnecessary long waiting periods. The experts at an outsourced accounting firm are also more cost effective because they offer consistent billing and fast response times. By doing so, they ensure that you and your business’ financial needs and services are being well taken care of.
Now that some advantages and disadvantages of CPA firms have been given to you, choosing to either stay or outsource is a decision that you have to make for your business. Remember that CPA firms are wildly different from using an outsourced accountant, so it’s important that you consider the benefits of both before deciding what’s ultimately best for your company and its continued success.