Is Your Certified Public Accounting Firm Full Service?
Searches for CPA firm, or certified public accounting firm, are big online. Those doing the searches often have differing ideas of just what a certified public accounting firm does. The limited or focused services viewpoint is that the firm consults with clients, gives them advice on tax related strategies, and in some cases, they also prepare the tax returns. Those are services that a certified public accounting firm should provide, but a full service firm offers much more.
Bookkeeping: Often the bookkeeping function of accounting is performed by others, either employees or hired bookkeeping companies. They gather, post, and keep the records of all financial transactions. Income, expenses, and other tax-related transactions are recorded for documentation of activities to back up the tax returns. The full service certified public accounting firm will include bookkeeping in their services, as it keeps a “chain of custody” so to speak of the financial transactions and how they were posted and categorized.
Tax preparation: Rather than just reviewing tax returns prepared by others, the full service certified public accounting firm will prepare the returns. This keeps the process chain going that assures the ability of the firm to justify actions to the IRS should there be questions.
Tax planning: Remember the old saying that “the only sure things are death and taxes.” Business taxes are forever, so planning is critical for future events, rules changes, and tax consequences of business and personal actions. The certified public accounting firm works with the business owner(s) to plan for future events and create tax strategies for the legal minimization of taxes paid.
Audit protection and representation: By keeping every step of the recordkeeping through tax preparation under one roof, the certified public accounting firm has all the information under its control. The training to become a CPA added to the IRS certification to represent you means that the CPA has the information in hand about what the IRS expects and what they have done regarding your returns. This means that your risk of audit is reduced, but should the IRS have questions, your CPA firm is ready with end-to-end answers.
Business entity decisions: How you classify your business entity has liability considerations, but also major tax consequences. Your CPA firm can advise as to the best entity structure for your business and personal needs:
- Sole proprietorship
- Limited Liability Company
The structure can also change as your business grows.
Estate Planning: As you grow your business and personal wealth, your CPA firm can work with you to set up your estate for the future, from retirement planning through the possibility of your incapacitation and the eventual distribution to your heirs.
Asset protection: It is an unfortunate fact that the more wealth you accumulate, the bigger the threats to your assets can become. Your full service CPA firm provides ongoing asset protection advice and planning, including liability protection and financial strategies to protect the value of your assets.
Your certified public accounting firm is your one-stop resource for the financial success of your business.