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E-Myth – “Why most small businesses don’t work & what to do about it”

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Chartered Professional Accountants E Myth

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CFO Services | Entrepreneurs Should Hire A Chartered Professional Accountant

Contrary to what a lot of entrepreneurs think, CFO services says that there is a huge difference between a designated accountant and an undesignated accountant. In order to complete the chartered professional accounting program, accountants have to go through an additional three years of schooling, while working in an approved chartered professional accounting firm as well. This additional experience helps put the theoretical knowledge they gained from their undergraduate degree into practice. When entrepreneurs are starting their business, they should ensure their ending up with an accountant that is going to be able to significantly help them and their business succeed.

Undesignated accountants have their undergraduate degree, four years of a business degree, majoring in accounting. However, that leaves them with for years of great theoretical knowledge, but absolutely no experience applying that to real-life situations, or with real businesses. How important a great accountant is to businesses, is it can help them avoid the three most common reasons why businesses in Canada fail. They failed because they run out of money, because they cannot find the market for their product, and they cannot find the right team. All of these things can be avoided with the right business plan and tax plan. Chartered professional accountants have many years of experience helping businesses become successful, and can help ensure that they are doing everything that they can to not only avoid problems but actually succeed.

Many entrepreneurs do not understand the difference between an accountant and a chartered professional accountant, thinking that all professionals that can call themselves an accountant have the same level of experience when they finish school. This is not true, undesignated accountants are allowed to work in accounting firms as well as open their own firms. Business owners should be aware of how to tell at accounting firm that they are thinking of using has their professional designation or not. CFO services says that the first way that entrepreneurs can check to tell if their accounting firm has their designation, is simply by looking at the firmís name. Only designated accountants are allowed to use the following acronyms in their business name: CPA, CGA, CMA, CA or LLP. They also might have the words chartered professional accountants, or professional associations in their name.

CFO services says that an undesignated accounting firm may overplay their undergraduate degree in hopes that typical business people do not know the difference. They will have their undergraduate degree prominently displayed on their office wall, they may even tell people that they majored in accounting, or have said that they have experience in the CPA program. But none of these things indicates that they actually have completed the CPA program, and achieve their designation.

With how important hiring the best accountant is for their business, entrepreneurs should ensure that they are hiring a chartered professional accountants, because it can literally help a business owner succeed in business, and beat the odds that 50% of businesses end up failing.

CFO Services | Entrepreneurs Should Hire A Chartered Professional Accountant

When small business owners do not understand that there is a difference between undesignated accountants and chartered professional accountants, CFO services says that they may unknowingly hire the wrong professional to work within their business. The reason why it is so important that small businesses have the best accountants they can find, is because the failure rate for business is so high, and accountants can help businesses with efficient tax plan, and a business plan that can help them increase their cash flow, and avoid proactively a lot of the reasons why entrepreneurs fail.

One of the reasons why business owners tend to end up with an undesignated accountant is because they make the mistake of hiring based on hourly rate. While it is true that entrepreneurs need to be very frugal when they first open up their new business, CFO services says that accounting is one area where they should not endeavor to hire the cheapest they can find. The reason is, when accountants do not have their professional designation, they often charge a lower hourly rate, to make up for their lack of experience. Chartered professional accountants may charge more, because they have twice as much schooling.

By hiring an accountant without the professional designation, because they charge less per hour, business owners may unknowingly end up paying far more money at the end of the month. How that happens, is because it takes the undesignated accountant much longer to do the job than it would have taken a chartered professional accountant. By charging more hours than a designated accountant, an entrepreneur ends up with a larger bill at the end of the month that if they had gone with the chartered professional accountant in the first place.

Business owners also end up with a poor product, if they hire an accountant that lacks experience. CFO services says that one example is when an undesignated accountant worked on a file for customer, and told them they had twenty thousand dollars in a refund coming to them, and when they filed of the taxes, it turned out that CRA did not owe the entrepreneur it was the other way around. Costly mistakes like this happen when an inexperienced accountant is working on finances.

Also, undesignated accountants lack the practical experience that chartered professional accountants get through their schooling. This means, and they lack the experience of inefficient tax planning for business owners. They end up with a tax plan that is inefficient, potentially costing an entrepreneur thousands of dollars in additional taxes they have to pay the if they would have asked a chartered professional accountant to work on their taxes in the first place. This increased taxes that they are paying, could have been money that they spent in their business growing it, or increasing the cash flow in their business to help avoid running out of money. Also, the more taxes that an entrepreneur can save, and the more money they can take out of their business and use it to live, or save for the future.