One of the most pressing questions for individuals and businesses is whether to hire a certified public accountant (CPA) or an accounting firm. The most important difference is that CPAs are allowed to sign tax returns for clients and represent them during a tax audit. Accountants don’t have the same standing with the IRS. All CPAs are accountants, but not all accountants are CPAs. A CPA has an advanced level of rigorous training, expertise and certification.

The success of any business relies on its financial health and individuals need to choose the right professional for their needs. The terms CPA and accountant are often used interchangeably, but there are distinct differences.

Accountant

An accountant provides basic bookkeeping tasks and can verify the work of an in-house bookkeeper.  They create reports and analyze those documents to generate long-term business plans. The professionals file tax returns and provide tax planning advice. An accountant can perform cash flow management and provide projections, along with bookkeeping services.

Accountants record, maintain and interpret financial records. They ensure the accuracy of financial documents, evaluate operations and can recommend best practices for clients. Accountants can create forecasts, perform risk analysis, and provide guidance on reducing costs and enhancing revenues.

CPA

A CPA provides all the services of an accountant and more, especially forensic accounting. They’re able to detect irregularities ranging from embezzlement to tax evasion. In addition to passing the stringent CPA certification exam, to keep their license, CPAs must also complete yearly educational requirements.

CPAs can legally represent clients before the IRS in the event of an audit. A CPA can file taxes and they utilize the most advanced financial software on the market that’s not available to the average individual. They’re experts in financial planning, provide clients with profit and loss statements, and can assist with profit-sharing and employee benefit packages. CPAs provide the data that business owners need to make sound decisions for the future of their company.

At Peavy and Associates PC our mission is to assist you with all your tax preparations, payroll and accounting needs.  We provide our clients with professional, personalized accounting services and guidance in a wide range of financial and business needs. Give us a call today and discover why our clients return to Peavy and Associates, PC year after year!

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Making a profit in a business is derived from several different areas. It can get a little complicated because just as in our personal lives, business is run on credit as well. Many businesses sell their products to their customers on credit. Accountants use an asset account called accounts receivable to record the total amount owed to the business by its customers who haven’t paid the balance in full yet. Much of the time, a business hasn’t collected its receivables in full by the end of the fiscal year, especially for such credit sales that could be transacted near the end of the accounting period. 

The accountant records the sales revenue and the cost of goods sold for these sales in the year in which the sales were made and the products delivered to the customer. This is called accrual-based accounting, which records revenue when sales are made and records expenses when they’re incurred as well. When sales are made on credit, the accounts receivable asset account is increased. When cash is received from the customer, then the cash account is increased and the accounts receivable account is decreased. 

The cost of goods sold is one of the major expenses of businesses that sell goods, products or services. Even a service involves expenses. It means exactly what it says in that it’s the cost that a business pays for the products it sells to customers. A business makes its profit by selling its products at prices high enough to cover the cost of producing them, the costs of running the business, the interest on any money they’ve borrowed and income taxes, with money left over for profit.

When the business acquires products, the cost of them goes into what’s called an inventory asset account. The cost is deducted from the cash account, or added to the accounts payable liability account, depending on whether the business has paid with cash or credit.

At Peavy and Associates PC our mission is to assist you with all your tax preparations, payroll and accounting needs.  We provide our clients with professional, personalized accounting services and guidance in a wide range of financial and business needs. Give us a call today and discover why our clients return to Peavy and Associates, PC year after year!

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In today’s busy world, it can be difficult to monitor and manage your financial health. Keeping track of your finances involves more than simply knowing how much is in your account or making sure you pay the rent or mortgage on time. There are a number of ways that anyone can utilize to better manage their money that includes the following, in no particular order.

Accurate Budgeting

A budget doesn’t mean you can’t spend for fun. It does mean that you need to account for the must-pay expenses first, such as rent, car payments, utilities, groceries, and insurance premiums. The remainder will provide information on major expenditures ad areas where you might save.

The Little Things

Small expenses are the bane of a budget. They nibble away at money that you could be saving and they account for a significant amount of money each day. Some of those small expenses include eating lunch out, whether it’s by yourself or with co-workers, or designer coffees and juices. Start saving receipts from each purchase and total them up at the end of the month or use a debit card for each purchase so you can go back and identify each one on your bank statement.

Savings

Everyone should have a savings goal whether it’s for a major purchase or for retirement purposes. If your budget doesn’t have a category for savings, create one. It can be any amount you want, but financial advisers recommend a set percentage of your income. Don’t be tempted to draw upon your savings. If you have extra money at the end of the month, shift it to your savings.

Software

There are dozens of software programs that will help you budget your money, track expenditures, and even send you alerts via mobile device so it’s easy to manage your money on the go with today’s busy lifestyles.

At Peavy and Associates PC our mission is to assist you with all your tax preparations, payroll and accounting needs.  We provide our clients with professional, personalized accounting services and guidance in a wide range of financial and business needs. Give us a call today and discover why our clients return to Peavy and Associates, PC year after year!

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Accountants and auditors help to ensure that the Nation’s firms are run efficiently, its public records kept accurately, and its taxes paid properly and on time. They perform these vital functions by offering an increasingly wide array of business and accounting services, including public, management, and government accounting, as well as internal auditing, to their clients. Beyond carrying out the fundamental tasks of the occupation-preparing, analyzing, and verifying financial documents in order to provide information to clients-many accountants now are required to possess a wide range of knowledge and skills. Accountants and auditors are broadening the services they offer to include budget analysis, financial and investment planning, information technology consulting, and limited legal services.

Specific job duties vary widely among the four major fields of accounting: public, management, and government accounting and internal auditing.

Internal auditors verify the accuracy of their organization’s internal records and check for mismanagement, waste, or fraud. Internal auditing is an increasingly important area of accounting and auditing. Internal auditors examine and evaluate their firms’ financial and information systems, management procedures, and internal controls to ensure that records are accurate and controls are adequate to protect against fraud and waste. They also review company operations, evaluating their efficiency, effectiveness, and compliance with corporate policies and procedures, laws, and government regulations. There are many types of highly specialized auditors, such as electronic data-processing, environmental, engineering, legal, insurance premium, bank, and health care auditors. As computer systems make information timelier, internal auditors help managers to base their decisions on actual data, rather than personal observation. Internal auditors also may recommend controls for their organization’s computer system, to ensure the reliability of the system and the integrity of the data.

Government accountants and auditors work in the public sector, maintaining and examining the records of government agencies and auditing private businesses and individuals whose activities are subject to government regulations or taxation. Accountants employed by Federal, State, and local governments guarantee that revenues are received and expenditures are made in accordance with laws and regulations. Those employed by the Federal Government may work as Internal Revenue Service agents or in financial management, financial institution examination, or budget analysis and administration.

At Peavy and Associates PC our mission is to assist you with all your tax preparations, payroll and accounting needs.  We provide our clients with professional, personalized accounting services and guidance in a wide range of financial and business needs. Give us a call today and discover why our clients return to Peavy and Associates, PC year after year!

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Building a financial cushion for your business is never easy. Experts say that businesses should have anywhere from six to nine months worth of income safely stored away in the bank. If you’re a business grossing $250,000 per month, the mere thought of saving over $1.5 million dollars in a savings account will either have you collapsing from fits of laughter or from the paralyzing panic that has just set in. What may be a nice well-advised idea in theory can easily be tossed right out the window when you’re just barely making payroll each month. So how is a small business owner to even begin a prudent savings program for long-term success?

Realizing that your business needs a savings plan is the first step toward better management. The reasons for growing a financial nest egg are strong. Building savings allows you to plan for future growth in your business and have ready the investment capital necessary to launch those plans. Having a source of back-up income can often carry a business through a rough time.

When market fluctuations, such as the dramatic increase in gasoline and oil prices, start to affect your business, you may need to dip into your savings to keep operations running smoothly until the difficulties pass. Savings can also support seasonal businesses with the ability to purchase inventory and cover payroll until the flush of new cash arrives. Try to remember that you didn’t build your business overnight and you cannot build a savings account instantly either.

Review your books monthly and see where you can trim expenses and reroute the savings to a separate account. This will also help to keep you on track with cash flow and other financial issues. While it can be quite alarming to see your cash flowing outward with seemingly no end in sight, it’s better to see it happening and put corrective measures into place, rather than discovering your losses five or six months too late.

At Peavy and Associates PC our mission is to assist you with all your tax preparations, payroll and accounting needs.  We provide our clients with professional, personalized accounting services and guidance in a wide range of financial and business needs. Give us a call today and discover why our clients return to Peavy and Associates, PC year after year!

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There are many reasons that accounting is being outsourced more and more by various companies. Some may think that utilizing outsourced accounting services is a bad concept because of less control and more expenses, however that is a myth that has actually been proven wrong countless times again and again. In reality, there are way greater benefits from outsourcing your accounting services, then by arranging your own accounting department or doing your accounting yourself. We will discuss the advantages of outsourced accounting and permit you to see why it is a popular action that lots of businesses and organizations are taking.

Using outsourced accounting services can, in fact, save you a lot of money in the end. By outsourcing your accounting needs you there’s no need to hire staff members to establish an in house accounting department. This conserves not only cash but also time. It costs money and time to find certified employees to run your accounting department. With outsourced accounting services,  there’s no need to stress over incomes, employee compensation, insurance coverage, or a number of the other expenses that having staff members entails. Another major benefit is that you do not have to fret about losing an employee and having to discover another in house accountant to change the one you lost. There are also lots of accounting firms that can incorporate their services with your own accounting software so that it provides a simple accounting integration.

By removing the need to focus on your accounting you preserve better relationships with your clients…

Another benefit that comes from outsourcing your accounting, is that you can focus more on the accounting information. This removes needing to focus on entering your accounting details and allows you to look at your present circumstance and make preparations for future enhancements and developments with the information provided. By outsourcing, you can focus entirely on payments, billings, and profit and losses. It free’s up your time so you will be able to spend it more productively by building and preserving much better relationships with your providers and clients.

By using outsourced accounting services, you have a lower threat of error and problems with your accounting. It is much better to trust your accounting requirements with a certified professional rather than attempting to do your accounting yourself. Unless you are a certified accounting professional, you have an there will always be the threat of making an error with your accounting. This possibility of error is nearly null and void when you utilize an outsourced accounting company that their sole focus is on the field of accounting. Any errors can have a very negative impact not just on your records of what is owed and needs to be paid but also on your present costs and forecasts associated with your profits and losses. By not correctly and properly preserving accounting records, you run a high risk of failure as far as your personal or business accounting is concerned.

Clearly outsourcing your accounting has shown to offer many benefits. These advantages will not only save you money and time but will equally provide the solutions to help you grow and expand your organization. Accounting can be an extremely exhausting job that requires a lot of attention to information along with understanding to have it done properly. Because accounting can be contracted out quickly and can be done at a lower rate contracted than in house, outsourced accounting has actually shown over time again and again to be the best solutions for businesses and personal accounting solutions alike.

At Peavy and Associates PC our mission is to assist you with all your tax preparations, payroll and accounting needs.  We provide our clients with professional, personalized accounting services and guidance in a wide range of financial and business needs. Give us a call today and discover why our clients return to Peavy and Associates, PC year after year!

 

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