From Taxes to Budgets: An Accounting Blog

Posted on: 19 March 2020

Certified public accountants are professionals who provide advice on a wide range of topics. Whether you run a business or are dealing with personal finances, a CPA is a great resource to turn to. It's important as you work with a CPA, though, to understand the job in terms of its four basic components. Take a look at each one so you can get more out of your relationship with your CPA.

Handling Records

Yes, this is accounting in its most basic form, but that doesn't mean you should take the idea lightly. If you're running a business, for example, you need to maintain records of receipts, inventories, assets, and liabilities. There's always a chance you'll be asked by someone in business or an authority to present documentation regarding the state of your business and its conduct.

The rise of computing technologies has also made certified public accountants into experts who advise on the tech side of bookkeeping. If you need to know, for example, the differences between using QuickBooks and Xero, two of the biggest accounting software packages in the world, that's a conversation you'll want to take up with a CPA.

Classification

Putting items in the right bins is just as important of a task. If you treat something as an above-the-line expense, for example, you have to be able to justify that in tax and corporate filings. This means maintaining a faithful and accurate ledger with every item properly classified.

Reporting and Summarization

Even at a small business, there's immense value in producing reports and summaries. This is because it's nearly impossible to grow a business without knowing what the bottom line is.

Some reports are critical for your own understanding of your finances, but others are required by law. This may include producing reports on a quarterly or annual basis in accordance with the laws that apply to your industry and the size of your operation. Certified public accounts will advise their clients about the appropriate ways to report income, expenses, and assets.

Analysis

It's easy to look at the product of accounting and feel like it's just a wall of numbers. Reading those numbers is important, and an accountant can guide you through what each item means.

An independent perspective is also worth a lot. Even if you're highly numerate, it can be beneficial to look at your accounting figures with fresh eyes and less emotional connection.

For more information, contact a company like John M Vlasac & Company.