Certified Public Accountant (CPA) firms handle the auditing, accounting, financial, and consulting aspects of nonprofit, private, and public businesses, along with government agencies. These organizations need a minimum of one state-licensed certified public accountant from the state they operate.
Each state establishes licensing and certification requirements of the CPA, which is why CPA qualifications differ from state to state.
In this post, we explain CPA firms, what it means, what they do, and common questions about the field.
Looking for a CPA firm to handle your company’s financial planning? Contact us now to speak with one of our experts.
CPA Firm Meaning
A Certified Public Accountant Firm (CPA firm) is a firm that’s licensed in the state it operates and is owned, at least partially, by a CPA.
CPA firms are usually auditing and accounting firms that go beyond generalized tax and accounting firms. From tax preparation to international accounting practices, these tax professionals represent clients while providing consulting services.
These firms can specialize in many different areas:
- Auditing
- Tax Preparation
- Accounting
- Financial Consulting
- Systems Implementation
Business goals become more easily achievable with an expert CPA handling your company’s financials.
What is a CPA?
A Certified Public Accountant (CPA) is an accountant who’s licensed to provide auditing, accounting, financial, and consulting services for businesses. Their job includes evaluating performance metrics within the business, ensuring no laws are violated in the process of transactions or other operations that affect the company’s assets or income.
CPA services are essential come tax season. Between bookkeeping, tax planning, and filing returns, these professionals are crucial for businesses.
What Does a CPA Firm Do?
The work of a CPA firm is diverse and includes various financial services for businesses and government agencies. These services ensure organizations are operating without violating state and federal laws while implementing a strategy to scale.
CPAs offer their clients a wide range of services, which can be categorized in the following ways:
Auditing – Auditors assess a company’s financial statement to ensure it is an accurate reflection of the business’s financial position in case of an audit.
Tax Preparation – CPAs help businesses and individuals comply with tax laws and file tax returns.
Accounting – Accountants keep track of all business, personal, and investment transactions. They also help individuals or businesses prepare ledger entries, develop budgets, and reconcile accounts to balance out what has been earned versus what has been spent.
Financial Consulting – Financial consultants provide assistance with company goals so they can be achieved more easily. This usually involves providing information about financial metrics and how they affect the company’s growth.
Systems Implementation – This aspect of a CPA firm helps businesses transition to new software or technology by helping them understand how it works and what kind of return they will get on their investment.
It’s easy for companies to see increases in efficiency and productivity when an efficient system is implemented correctly. This is why most CPA firms worth their weight in gold are highly sought after for anyone who isn’t a tax professional themselves.
CPA Firm vs Accounting Firm
The main difference between Certified Public Accountant firms and accounting firms is that CPAs have a CPA license to provide auditing, accounting, financial, and consulting services for businesses. They also have a role to play in estate planning.
CPAs must meet stringent requirements set forth by the state they operate in. These requirements include holding a Bachelor’s degree (some states may have more demanding minimum education requirements) and passing the Uniform Certified Public Accountant Examination before becoming licensed.
Accountants, on the other hand, are not licensed and typically only provide tax preparation and bookkeeping services. While some accounting firms may have a CPA designation on staff, they are not required to have one.
Not all accountants are CPAs. However, all CPAs are also accountants that can represent clients to tax authorities like the Internal Revenue Service.
So, if you’re looking for a comprehensive financial solution for your business, it’s best to seek out a CPA firm. They have the experience and expertise to help your business grow and succeed.
CPA Services Summarized
As outlined above, CPA services typically include the following:
Auditing – CPAs help businesses and individuals comply with tax laws and file tax returns.
Accounting – Accountants keep track of all business, personal, and investment transactions. They also help individuals or businesses prepare ledger entries, develop budgets, and reconcile accounts to balance out what has been earned versus what has been spent.
Financial Consulting – Financial consultants provide assistance with company goals so they can be achieved more easily. This usually involves providing information about metrics shown in the operation’s financial statements and explaining how they affect the company’s growth.
Systems Implementation – These firms help businesses transition to new software or technology by helping them understand how it works and what kind of return they will get on their investment.
CPA firms are highly sought after for their expertise in tax planning, management of financial affairs, and providing businesses with the knowledge they need to keep on top of their business finances.
Accounting Services Summarized
Accounting firm services typically include the following:
Bookkeeping – Accountants keep track of all business, personal, and investment transactions.
Tax Preparation – Accountants help prepare individual or company tax returns. They can also assist with audits or appeals if a client is audited by the IRS.
Payroll Services – Some accounting firms will provide payroll services for clients so they don’t have to outsource this function.
Tax Planning – Accountants help clients figure out the best ways to reduce their tax burdens so they can keep more of what they earn.
Common Questions about CPA Firms
What is the purpose of a CPA firm?
These firms handle the accounting, auditing, financial, and consulting duties for non-profit, private, and public companies, along with government agencies.
What is a CPA consulting firm?
A CPA consulting firm is a private company that provides CPA services to clients. This usually involves analyzing financial statements and providing a clear path to profitability with the operation’s finances in mind.
What does being a CPA mean?
Being a CPA means that an individual is licensed and has met the state’s requirements to provide accounting, auditing, financial, and consulting services.
Are CPA Firms Better Than Accounting Firms?
These firms offer more knowledge to the companies they work with. The employees are experts in their niches, and they understand how to properly manage companies’ financials with legal legislation in mind.
Looking for a CPA team to handle your company’s financials? Northstar is here for you!
Contact us now to speak with one of our professionals and learn how we’ll scale your operation.
