There are many bookkeepers, accountants and tax preparers out there who compete for your business. With just a single web keyword search, you could find dozens of such service providers within the 5 mile radius from you. Which one of them should you entrust your books? tax return preparation? family financial planning? You could be tempted to go for the lowest price offered, just because you believe all of these professionals are essentially the same and can provide the same level of services that would be acceptable to you. Often, you could also be tempted by being connected with a service provider through a civic organization such as neighborhood development organization, homeowners association, club or a church. They may even approach you and ask for your business. You are likely to succumb to their pressure out of friendly feelings bound by a sense of “duty” belonging to the same group. There may also be a referral from a friend or associate raving about a particular provider and highly recommending him or her. That is all good but… could there be a difference in the levels of service a professional can render to you based on their level of education, training and experience? Or based on their licenses, certificates and other credentials? Will these differences translate into something tangible for you and your business such as more and better substantiated deductions? How about properly calculated credits? And not to forget proper partner or shareholder basis.
We have seen over the years that folks who initially skimped on the quality accounting professional for the very considerations we described above, have been shortchanged in the tax area and unnecessarily paid more tax than they could have had they worked with a professional of a higher caliber from the start. So who exactly is that high-caliber professional, you may ask? Why would I need to hire that professional rather than my neighbor Sue the bookkeeper, or my fishing buddy Jack the tax preparer, or my fellow church member Trish the accountant?
There is only one type of accounting professional you should completely trust with your financial life and decision-making. That professional is called Certified Public Accountant (CPA). To become a CPA, one has to have a college degree, often an advanced degree such as Master’s; get a certain number of credit hours in accounting classes; pass the rigorous four-part CPA exam that has a first-time pass rate of less than 50% (many will say that this exam is more difficult than LSAT, a law school exam); and then meet the continuing education requirements every year that require a significant time commitment. As you can see, there is a good reason why there are only 377,000 CPAs in the US out of 330,000,000 people. That is about 0.1% of US population. Compare this to 1,200,000 tax preparers and 2,100,000 bookkeepers in the country. Needless to say, the numbers speak for themselves.
CPAs are trusted tax and financial advisors that are bound by the code of ethics that simply does not exist for bookkeepers and non-licensed tax preparers. CPAs have had many more hoops to jump through than any bookkeeper or tax preparer ever had. CPAs have a CPA-client privilege that is only second to attorney-client privilege. CPAs have a breadth of knowledge and perspective that few, if any lower level professionals possess. CPAs are allowed to sign off on financial statements, issue audit opinions and perform other actions that are off limits to bookkeepers and tax preparers.
If you really care about your financial picture, want to keep more of what you earn, want to steer clear of any unnecessary IRS challenges due to poorly prepared tax filings, you should hire a CPA, even if it means paying more. Just like with many other facets of life, you get what you pay for. Just like you want to have the best doctor to take care of your health, you should pick the best in the profession, that is a CPA. America counts on CPAs.