Blog

Get expert advice on every topic you need as a small business owner, from the ideation stage to your eventual exit. Our articles, quick tips, infographics and how-to guides can offer entrepreneurs the most up-to-date information they need to flourish.

Subscribe to our blog

What services are provided by certified public accountant firms?

Posted by Shivali Anand

May 19, 2022    |     5-minute read (889 words)

An accounting firm is more than a glorified bookkeeping service. It is more like a business partner that helps your company flourish. Broadly speaking, accounting firms help maintain a business’s financial order, ensure it is tax-compliant and help it prepare for growth. 

That said, not every accounting firm offers the same services. To find the right match for your business’s particular requirements, you should evaluate a variety of firms before engaging one.

What is a CPA firm?

In the U.S., the CPA is a license to provide accounting services to the public. Most states require CPA license renewal every one to two years. Every CPA firm is required to have a minimum of one state-licensed certified public accountant from the state in which the business operates. This individual often serves as a partner or as the head of the business. 

In some scenarios, there may be multiple CPAs serving in this senior capacity. Based on the firm’s customer base, other staff may comprise auditors, tax accountants, senior or junior accountants, cost accountants, technicians for accounts payable or receivable, software or information technology professionals, project accountants or other specialized accountants.

In general, an accounting firm’s CPAs are responsible for managing high-end clients and new account activities. Some firms offer more specialized financial and consulting services in areas such as auditing, information technology, international accounting, forensic and environmental accounting, business and management consulting, and tax and individual financial planning.

CPA firms offer the following services

From the perspective of peers, regulators and clients, having a CPA license gives accountants a higher standing than those without the credential, because it is understood that they have met comprehensive educational requirements, passed a rigorous exam and committed to following a code of ethics.

Among the main services provided by CPA firms are:

1. Tax preparation and planning

Tax preparation and planning is a standard service that accountant firms provide for clients, since tax liability affects essentially every business. They also ensure businesses keep up with evolving tax rules and comply with the latest IRS guidance.

As you will be busy growing your business, you are unlikely to have sufficient time to complete your tax return. But filing late can result in financial penalties. Hiring a CPA firm keeps you out of hot water with taxes, and the professionals excel at finding methods to reduce the amount of tax businesses owe.

2. Accounting services

Accounting, much like bookkeeping, involves determining which financial transactions have been completed by the organization and documenting those transactions. The primary distinction between the two is that bookkeeping focuses on documenting transactions, whereas accounting focuses on interpreting the data to compile a financial statement for the organization.

The financial accounts prepared by the CPA firm hold special significance since they reveal whether the company is advancing and why or why not. You can also use this data to inform your company's next move.

3. Auditing services

Auditing is the process of evaluating a company's financial records, looking for mistakes and determining whether the company is operating in accordance with applicable laws and guidelines. This is a requirement that must be met periodically.

The auditor is a specialist accountant who typically works independently and not within the firm. This is so the auditor can make an unbiased judgment regarding the company's financial statements, including whether they were prepared fairly, accurately and in line with generally accepted principles of accounting.

4. Payroll and bookkeeping

CPA firms typically provide bookkeeping as a simple but crucial financial function to support clients. Bookkeeping entails valuing the company and keeping track of all commercial activities. In addition, the bookkeeper must track which account each transaction impacts, as the firm could own multiple accounts.

During the accounting or bookkeeping process, the accountant or bookkeeper values these transactions. To run a successful business, all financial transactions need to be recorded. However, bookkeepers don’t necessarily need to be accountants.

5. Consulting services

Accountants are often considered financial consultants. They tap into their financial expertise to review your business’s existing position, identify the next best move to take, alert you of changes in business legislation in your sector and advise how to make your company more profitable and productive. 

In addition, CPA firms lend a hand in the establishment of new companies and offer the necessary services throughout the business's development, including:

• Keeping up with government rules.
• Setting up accounting and control systems.
• Building cash-flow models.
• Providing guidance on mergers, purchases or asset sales.
• Developing or revamping financing.
• Offering business valuation services.
• Setting salary and benefit plans for employees.
• Discovering new and better methods to make money.

6. Advisory services 

Having accounting professionals take care of your company's financial matters can heavily influence whether your business succeeds. It is worth noting that a CPA firm can act as an outsourced CFO in terms of providing advisory services and developing operational and financial policies.

Services beyond the basic

In response to changing client demands, new CPA services pop up periodically. CPA firms today routinely receive requests for assistance in areas such as: 

• Reorganizations in bankruptcy and insolvency.
• Settlements in divorce cases.
• Civil cases.
• AR & AP management.
• Inventory management outsourcing services.
• Fraud investigations.
• Lawsuits against professionals for malpractice.
• Virtual accounting services.
• Control account reconciliations.
• Accounting software set up.
• Operational analysis.
• Virtual and other CFO services.

We provide you with essential business services so you can focus on growth.