Most small to medium size businesses quickly get to the point where they realize they need an accountant who is versed in everything from tax preparation to financial planning. When they can no longer handle all of the financial work themselves, they start shopping for a bookkeeper to help them with the complexities of their finances. Some companies opt for a generic bookkeeper while others hire a CPA, assuming that the difference between the two is more a matter of cost per hour for their services than any difference between the services they offer. In fact, there are numerous differences between them that make a Certified Public Account well worth every dime you spend.
Anybody Can Be An Accountant
And that does mean anybody. There are no federal or state guidelines a person has to meet before they can hang out their shingle as an accounting specialist. In fact, the very definition clearly allows anyone who is interested in doing the books to advertise themselves as an accountant, which is simply someone who looks after the financial records for a business or organization. If you work with figures, you can use the title without having to get a college degree, take a test or ensure that you understand finances. If you can use a calculator and are familiar with basic accounting software, you can be a bookkeeper for any company willing to hire you.
A CPA Has To Prove His Or Her Qualifications
You can’t, however, simply put up a sign and be familiar with bookkeeping to be a Certified Public Accountant. The certification process is a stringent one. You have to take a series of tests and pass them with the appropriate score in order to be allowed to refer to yourself as certified. In the state of Illinois, there are no fewer than four exams required and you will have to pass every one of them. Rigorous testing ensures that everyone who passes has been properly trained. What does that training entail? In most states, it means you’ve been to college and obtained the appropriate degree.
Education Is Critical
Even though someone has spent years as a bookkeeper, if they don’t have the educational background, they can’t call themselves a CPA if they haven’t completed at least 120 semester hours of the appropriate credit courses from a recognized educational institution. The courses have to include business law, accounting and auditing, with a focus on accounting.
Keeping Current Is Also Vital
Keeping a CPA designation can be as difficult as getting one because there are strict guidelines for maintaining certification. Anyone who is a CPA has to complete at least 80 additional hours of continuing education every two years in order to stay current on the constantly changing laws and regulations surrounding business accounting practices.
Will you pay a bit more to have a Certified Public Accountant work for your company? Yes, but you’ll soon realize that his or her knowledge, training and experience are valuable assets that will save your company a great deal more in terms of peace of mind and the best possible financial decisions for you and your business.