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

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CFO Services | The Importance Of Hiring Accountant Who Is A CPA

Many business owners may find it surprising that not all accountants, especially ones that own their own practice have a professional designation says CFO services. In fact, about half of all accountants who attempt the chartered professional accounting program actually pass, and are operating with just their undergraduate degree. Many entrepreneurs are not sure why the designation is important, and many others do not know the difference between a CPA and an undesignated accountant. Since half of all entrepreneurs fail in the first five years, hiring the right accountant to work on small businesses is extremely important.

The biggest difference between an undesignated accountant and one with a CPA is the level of schooling they have. Both accountants will have their seven-year undergraduate degree, with a major in accounting. However, for the undesignated accountant that is where their schooling ends. A chartered professional accountant on the other hand completes their undergraduate degree and then works for an additional three years apprenticing with the chartered professional accountant and an approved accounting firm. CFO services says that while the accountant is working full-time in the accounting firm, under the guidance of a chartered professional accountant, they also have to be completing additional courses, assignments and tests in the evening and on weekends.

The accountant who is going through the chartered professional accounting program, ends up being able to use their theoretical knowledge that they gained in their undergraduate degree, by applying it to real entrepreneurs and their businesses, under the watchful eye of a chartered professional accountants. This practical experience is extremely invaluable, because it allows the accountant to be able to see how all of the knowledge is actually used in real situations. In addition to that, the coursework that they are were doing outside of working hours, is designed to replicate real life accounting situations as well. This practical experience is huge benefit, and is the main difference between undesignated accountants and chartered professional accountants. The undesignated accountant will have four years of theoretical knowledge, and the chartered professional accountants will have seven years total of not just classroom learning, but working with real accountants and real businesses on real files. This is invaluable experience.

Many entrepreneurs are not sure how to tell the difference between the two, especially because undesignated accountants generally are not advertising the fact that they did not pass their chartered professional accounting designation. CFO services says that nondesignated firms tend to overplay the undergraduate degree, prominently displaying it on the wall, and saying that they have majored in accounting. It may even say that they have experience in the CPA program. But the experience of someone who did not complete it, and someone who did is massive.

When entrepreneurs know the difference between undesignated accountants and chartered professional accountants, CFO services says they will be able to choose the right accountant for their business. The goal should be for entrepreneurs to end up with the greatest accountant they can, because he will be able to help them end up with accurate financial statements, effective tax plan, and business plans that are going to help them succeed in business.

CFO Services | The Importance Of Hiring Accountant Who Is A Cpa

When entrepreneurs are thinking about their bottom line only when they go to hire an accountant, often end up hiring based on the cheapest hourly rate says CFO services. This is a mistake for several reasons. As Red Adair, the specialist in extinguishing and capping oil well fires has said, ìif you think it is expensive to hire a professional to do the job, wait until you hire an amateurî. Business owners to hire based on price end up with a poor product, and potentially having to pay more for it.

One of the reasons why an accountant might have a lower hourly rate, is because they are in undesignated accountant. Accountants with their chartered professional accountants designation, have gone through twice the level of schooling, and has passed extremely difficult tests in order to achieve their designation, and it is reflected in their hourly rate. However, an accountant with that much more schooling, is also that much more efficient. When entrepreneurs hire an undesignated accountant for a lower hourly rate, they often take at least twice as much time to do the same job, ending up costing the entrepreneur more money at the end of the month because they have had to bill far more hours. If an entrepreneur hired the chartered professional accountant in the first place, they would have a lower monthly bill says CFO services.

Another reason why business owners should hire a chartered professional accountants, is because they have the practical experience needed to prepare great tax plans. A great tax plan is extremely important to an entrepreneur, because it can help them save thousands of dollars every year if not more. It is one thing to have the theoretical knowledge about the income tax act, and it is quite another to have three years experience learning how it is applied in real life with real businesses. With how important tax plans are to entrepreneurs, they should hire the accountant that has the most experience with tax planning, and that is not necessarily an undesignated accountants.

Entrepreneurs may not know how to choose an accountant that has their chartered professional accountants designation, so CFO services says the easiest ways to tell, are by looking at the name of the firm. The name of the firm should have the words chartered professional accountants, or professional association in the name. Or, they will have letters after the name such as CPA, CA, LLP, CMA or CGA. All these are indicators that the accountant has their professional designation, and a wealth of experience.

When business owners are hiring an accountant for their business, they should understand the difference between a chartered professional accountant and an undesignated accountant, so that they can end up with the best professional for their business, is going to help them save money on their bills, save taxes, and help their business be even more successful.