What Makes a Good CPA?

As tax time comes to a close, I find myself once again thinking "phew, I'm glad that's over." It's also around this time of year when I think about how tedious tax preparation can be. If my lifestyle were any simpler then I suppose my tax preparation would be as well. Understanding all the various aspects of the tax code may truly be an act of futility. For that reason praise must be given to the men and women who have chosen a career replete with number crunching and studying tax preparation. These people are the accountants of the world.
Since I find it such a chore to prepare my own taxes I look to accountants for aid. Therefore, one may ask the question, "what makes an accountant worthy to toil through all of my receipts, W-2's, 1099's and various other itemized deductions?" To help answer that, I have come up with several attributes that I look for when trying to choose a good accountant.
Without a doubt one of the best attributes is knowledge of the tax laws. A well educated accountant is invaluable to the tax payer. Some people who have prepared taxes for individuals or businesses make claims about their experience in dealing with the IRS. No matter what their experience may be, many of them are not Certified Public Accountants. For me having the 3 letters "CPA" included on the tax preparers title brings comfort my mind because it shows at least that my tax preparer has been trained. Those 3 letters also imply accuracy and dedication.
Along with knowledge of the well trained CPA, a good quality for an accountant is punctuality of services. I understand that the client needs to present his/her tax documents in a timely manner so the preparer can meet specified deadlines. However, professionalism by staying ahead of the game and filing extensions when deemed appropriate are valuable weapons that I like to see in the CPA's arsenal.
Since there is a lot of responsibility placed on the client as well for accuracy when filling out tax documents, there are times when the client needs advice or coaching. Therefore, another great attribute of the CPA is availability. There have been countless times when looking at my tax paperwork confusion over certain things creates consternation. Being able to get a hold of any accountant knowledgeable of my circumstances may be a daunting task especially when dealing with a large accounting firm.
After reaching my accountant and relaying my concerns, the next attribute of importance is communication. As much as I admire professionals and the knowledge they possess in their area of expertise, sometimes they forget that not everyone understands their vernacular. Some questions are answered using verbiage that can leave you more confused than before you posed the question. Speaking plainly to the client about concerns can oftentimes be very refreshing.
In conclusion, the afore mentioned characteristics of accountants I feel are very important: Knowledge, Availability and Communication. With these qualities, the accountant can make their client feel less troubled by fear of institutional reprisals or reproach.

Organizing an Accounting Department - Basics

Many growing for profit and nonprofit organizations find themselves with financial reports that make no sense, "forgotten" revenues and slow bill paying processes. They may be at a point where the part-time bookkeeper is over his or her head and flooded in work. So, what can you do? You can look at accounting tasks and divide the work within these tasks. For example, a typical accounting department performs the following work:

• Pay bills - Accounts Payable
• Recognize revenues - Accounts Receivable
• Process payroll - Payroll Administrator

Other tasks associated with an accounting department are: Cash management, bank reconciliations, budgets, financial reporting and taxes. In large businesses each of these functions is performed by one individual or more. In smaller firms, tasks are shared and staff is supervised by a manager or a controller, who often is responsible for financial policies and procedures for the organization.
A mistake common in growing small businesses is to assume that accounting is easy and can be done by the person who is a receptionist or works in another part of the business. Without training or education, this person should be able to perform accounting functions of a full-charge bookkeeper. That's a mistake and is not fair. Hire accounting people who have the proper education and experience. Accounting managers or controllers should have at least a bachelors' degree in accounting. Someone with a four-year degree in business, and a few years of accounting experience may also qualify.
As you organize the department, consider segregation of duties. For example, the person that opens the mail or receives money is NOT the person who books revenues in the accounting system. If the person running accounts payable is also doing bank reconciliations, then a manager or controller should review the reconciliation and look at cashed checks.
Before hiring anybody for accounting positions, run a background check on all individuals, who should be trustworthy with a clean credit history. Of course, exceptions can be made, but they are usually rare occasions.
Many businesses organize their accounting department using flowcharts and job descriptions. You don't want to have the same task be performed twice or three times and at the same time, you don't want to miss an important process. Some firms hire outside consultants to help them in organizing their department for maximum efficiency, while considering risks and controls. Unfortunately, this last option is usually used after a fraud or loss situation, when people are traumatized and willing to pay for professional advice.
When considering a new accounting department, you have a few options and what works for one business may not work for another. You could organize the department yourself and then ask for an outside CPA or management firm to review your set up for internal control and efficiencies.

The Importance of Good Bookkeeping in Business

The announcement in January by HMRC that they intended to crack down on poor record keeping by SMEs was a wake up call to all businesses. The original proposal, which went out to consultation, involved the proposed investigation of up to 50,000 SMEs each year.
The consultation period finished on 23 February and we are still waiting for the final scheme details. However, many industry bodies have condemned the proposals. The Institute of Chartered Accountants of Scotland has calculated that the cost to an SME of a half day review will be in the region of £560, far more than the £54 envisaged by HMRC. In addition, whilst a sample check by HMRC revealed poor record keeping in around 40% of cases, experts disagree with the revenue assumption that in many cases the poor record keeping was either deliberate or would lead to underpayment of tax.
With potential fines of £3,000 for poor record keeping, businesses are urged to tighten up on record keeping as a way of pre-empting the Revenue. The best way of doing this is to employ the services of a good bookkeeper or at the very least a good bookkeeping programme.
When deciding what sort of bookkeeping system to set up, the first port of call should be your accountant. It is in their interest to help you to set up a system that is right for your business, particularly as this will help them to prepare your end of year accounts speedily and without error. You may well find that your accountant includes bookkeeping or offers free bookkeeping software as part of their standard package. Alternatively, they might offer a part time bookkeeping service or be able to recommend a bookkeeper for you.
Bookkeeping is not just about avoiding potential HMRC fines. Keeping up to date with receipts and payments will help you to stay on top of your businesses finances. VAT returns will be more accurate and by using appropriate accounting software can often be produced automatically at the touch of a button. In addition, by keeping on top of finances you will be able to quickly spot outstanding invoices and chase slow payers before they get away.
Improving record keeping also means keeping track of paperwork. Your accountant will be able to work with you to help to set up systems for dealing with paperwork and information. You may well find that by reviewing your procedures you can not only improve record filing but also simplify processes and save costs. Companies such as keebo.com and receipt-bank.com offer service that will take away the meticulous job of processing and keeping track of receipts and invoices by scanning, sorting and making it available electronically.
Whilst the crackdown on poor paperwork by HMRC is driven by their desire to collect all taxes owed they may in the long run be doing SMEs a great favour. With better record keeping leading to greater business efficiency businesses will be more on top of their finances. This in turn can lead to a reduced need for reliance on borrowing as well as a reduction in charges from accountants at the end of the financial year. Leaner and fitter businesses which are on top of their records and finances will be the winners and well set for taking every advantage of the upturn in the economy.

Advancements Within The Field Of Accounting

When considering a degree and career in accounting, many think of long days spent at a desk, scribbling numbers in various notebooks. You may be surprised to know that the fields of accounting and auditing are now much more technical in nature. The paper notebooks have been replaced by databases and information systems, and the types of careers available to those with an accounting degree have grown substantially.
The advent of these more high-tech methods of storing financial information means that accountants and auditors must also be trained to not only work within these types of systems, but may be called upon to help design and build them. A degree in accounting can help prepare you for these new types of challenges and opportunities.
Software and system designers may be adept at designing computers and computer systems, but they often have little to no knowledge of accounting. In these cases, accounting degree holders are often the key to providing the necessary insight to assist designers in creating systems that meet the needs of the accounting world.
Working with information technology firms is not the only new horizon in the accounting and auditing fields, either. With a degree in accounting, graduates also qualify for a career with the Federal Bureau of Investigation, where they may assist in investigating "white-collar" crimes, such as money laundering.
The field of auditing, which a degree in accounting can also prepare you for a career in, shows rapid growth and higher pay, according to the Bureau of Labor Statistics. Auditors help to ensure that financial statements of companies are free of errors and can help safeguard companies against such illegal activities as fraud.
Another appealing aspect of public accounting is that the actual work may be done from virtually anywhere. With an average annual salary of nearly $70,000, these professionals may choose to work from home, or even while traveling to remote locations. Once the initial face-to-face meetings and groundwork with their clients has been established, they simply need to be able to receive and transmit the necessary information to perform their duties, which can be done from almost any location these days.
Offering even a wider variety of career choices, as well as even higher salaries, becoming a certified public accountant is a very attractive option to many degree holders in the field. Becoming a CPA requires passing a four-part exam, as well as many other prerequisites, but it also opens additional opportunities to those who choose to do so. The added flexibility in career choices and availability of higher salaries makes the additional CPA requirements well worth it to many of these degree holders.

Things to Know About Business Accounting

Of course, today the "books" are on computer programs and software. Very few accountants still take care of business finances by using paper and pen. It is not as safe and human error can cause more problems than a computer malfunction. When it comes to things like finances and numbers, a computer will generally do a better job than a regular person with some accounting training. Many organizations will use their accountants to take care of all financial reports, taxes, analyses, and projects for the future of the company.
Accountants will use computer programs and software to help them work with economic data, recording, measuring, and interpreting figures from the documents of the company. They will prepare all of the tax forms and financial statements that are related to the customers' accounts according to the system that the company has in place. Without the proper accounting measures in place, productivity suffers and the company could fail completely. They are crucial to the financial success of any company.
Financial files will contain the financial data and this information will be held for many years as the company usually keeps records for an extended period. Some will keep them for many years, while others will put a cap on their old files of about two to three years, while archiving the rest for retrieval only under special circumstances, such as an audit.
An experienced accountant will be able to catch many flaws and faults in a system that is in place. They will be able to fix problems that inexperienced accountants may have made that caused some problems in the company. Some people simply have a natural talent for seeing the numbers and calculating them in their head. It is harder for others. Either way, when someone determines that this is the career they want to do and they put in the time and effort to learning all they can about it, they may begin to find new ways of doing things to make it even easier. There is a great deal of variability in the way finances can be controlled.
Some financial institutions, like banks, have ways of handling their funds that are unlike other similar businesses. When there are changes of accounting and finance rules, businesses should always stay on top and current. Computer software is updated every couple of years. The accounting field is always making necessary adjustments to keep up with the fluctuations in the laws and taxes.