What is the Difference Between an EA, a CPA, and an Accountant?Posted on October 26th, 2018
Between keeping track of your finances, preparing for tax season and understanding your obligation to the IRS, one can easily find themselves overwhelmed. With the different types of tax professionals out there, it can make the process of choosing an accountant even more confusing.
I’m sure you’ve heard of professional financial titles, such as EA, CPA, or Accountant, but what exactly are they? What do they do? And how can they help you when faced with confusing tax compliance issues? Below we discuss the differences between these experts and how they can make the financial world a little less complicated.
An Enrolled Agent, or EA, is a type of tax professional who focuses solely on managing tax arrangements for businesses or private entities. EA’s are considered tax specialists and recognized as such by the federal government. They have a vast knowledge of tax-related subjects such as income, estate, gift, payroll, levies, returns, inheritance, non-profits and retirement taxes.
A Typical responsibility of an Enrolled Agent includes representing his or her clients, be it a business or an individual, before the IRS on issues of audits, appeals or tax collection. An EA is the highest credential the IRS awards.
Certified Public Accountants
Differing from an EA, a Certified Public Accountant (CPA), has more flexibility and a wider range of services than an EA. States approve CPA’s while the federal government approves EA’s. CPA’s typically do most of their work for accounting firms of all sizes, and they don’t specialize in any one area of accounting. They can assist as advisors and consultants for all accounting, tax and financial services for businesses, individuals and other organizations.
CPA’s help their clients set and achieve their financial goals through wise budgeting and financial planning. These aspirations can be anything from a down payment on a home to opening a new branch of a business across the country. Because of their wide range of abilities, CPA’s are typically the go-to candidates when looking for a broader scope of expertise.
An accountant is a financial professional who performs functions such as audits or financial statement analyses for companies, organizations, or individuals. Accountants can either be employed with an accounting firm or at a large company with an accounting department, or they can set up an individual practice.
While accounting positions may fall under numerous categories such as public, management, forensic, government, or even sports, most accountants perform a common core of duties. Some of these tasks often include bookkeeping, tax preparation, auditing, and general administrative work.
If you or a loved one require sound financial guidance, we encourage you to call us today! Our licensed CPA is happy to answer any questions you may have!
How to Better Prepare for an A-133 AuditPosted on February 16th, 2018
Nonprofit organizations are already used to a yearly audit for tax reporting purposes. However, if they receive more than $75,000 in federal funding, then the IRS will require an A-133 audit as well.
A-133 audits are different enough from standard attestation engagements that the auditor must be knowledgeable in it to conduct. Alston & Company, CPAs, is passionate about helping our clients prepare for these engagements through our extensive experience in them. There are a few key steps we recommend you take in advance of an A-133 audit.
Organizing Major and Minor Grants
A not-for-profit organization must be able to separate the major and minor grants they received from the federal government and compile their associated records. They must also demonstrate compliance with all requirements set by their major grants.
If you receive any amount of federal funding, especially if you know the amount will necessitate an A-133 audit, then you need to keep all grants organized. You should separate your major and minor grants and compile their associated records. Your ability to demonstrate compliance with each grant’s unique requirements is improved by making this financial information as easily accessible as possible.
Unlike non-specified donations and revenue, the funds associated with each grant must be tracked separately from all other sources. The not-for-profit entity needs a clear, concise budget for each grant to fully monitor its use.
When you separate your organization’s grants and compile their associated records, you must include the documentation demonstrating that you followed that budget. In addition to preparing you for an A-133 audit, this process can reveal areas of improvement for budget compliance so you can correct these as soon as possible.
Internal Controls over Financial Reporting
The organization must clearly demonstrate how they operate each program financially. Since this requires accurate financial records and reports, they must be able to prove that the numbers on all documents are accurate. In other words, A-133 audits will examine a not-for-profit’s internal controls.
This may not be possible if your organization’s internal controls have significant oversights, which will be reflected in the auditor’s formally documented opinion. You should review your controls on a regular basis to find issues ahead of time. That way, you can correct them before they complicate an audit or, more importantly, your ability to serve your community.
Contact Us for A-133 Audit Support
Alston & Company, CPAs, offers nonprofit auditing services in Freehold, New Brunswick, Trenton, Newark, and anywhere else our clients do business in the tristate area. Whether you need an independent CPA to conduct an A-133 or need help planning for one, our firm can help you. For more information about our not-for-profit accounting services, call us today and schedule your consultation.
The Benefits of PowerChurch PlusPosted on February 1st, 2018
Accounting for churches and other religious organizations can be a challenging process. As a result, it is important that clergy members look for the advantages that allow their financial personnel to accurately track their revenue and contributions and maintain compliance with their tax requirements. Churches in need of accounting solutions can find the answers they need with PowerChurch Plus®.
Complete Church Management Software
Accounting is difficult for any organization, and the challenges only increase regarding religious organization finances. Any mistakes made in clergy membership, allowance and gift tracking, expenses, and donations can cause long-term tax compliance problems unless addressed promptly.
With PowerChurch Plus, you can more efficiently manage your religious organization’s books. From nonprofit payroll to sermon attendance, all aspects of a church’s operation are tracked by PowerChurch. The programs run within the software are fueled by good accounting information, enabling accurate automatic processes that make bookkeeping an easier task. It also maintains member information needed to precisely update the information regarding current clergy membership and their allowances.
User Friendly Software
Another key advantage of PowerChurch Plus is its user-friendly set up. PowerChurch Plus is designed so pastors and clergy members of any bookkeeping experience can more effectively manage their revenue changes and financial statements.
Additionally, Alston & Company, CPAs, are able to help churches in their bookkeeping self-management by training our clients in the use of PowerChurch Plus. We help our clients set up their accounts if they are brand new to the software for maximum efficiency, and we help streamline and update the existing accounts as well. Then, we educate the clergy members responsible for bookkeeping on the best practices of the software, so the church can get the most success from the software.
Affordable and Supportive
PowerChurch Plus is also beneficial because its price points are designed for a not-for-profit entity. This software platform is affordable to purchase, costing significantly less than more business-focused accounting systems. If there are any glitches that arise from its use, the makers of PowerChurch have a dedicated customer service department that can help you address these concerns; you will not have to go out of your way to hire an expert to fix technical errors.
Contact Us for Accounting Support
PowerChurch Plus training and advisement are only two of the many ways our company helps churches navigate their unique financial requirements. Alston & Company, CPAs, provides dedicated church accounting services in Freehold, Newark, New Brunswick, Trenton, and beyond. Our passion is to help religious organizations minimize the time they need to spend on their books, so they can maximize their efforts in serving their community.
For more information about our church accounting services, call Alston & Company, CPAs, today and schedule a consultation.
Nonprofit Accounting ChallengesPosted on January 18th, 2018
Every not-for-profit organization can face accounting challenges unique to their field. The balancing act between managing money provided by the government and their own revenue creates distinct complications. Knowing what these, and other matters of compliance are, will help you better ensure a long, successful operation for your non-profit.
Managing Multiple Funding Sources
Given that non-profits are involved in furthering altruistic causes, there are plenty of governmental initiatives designed to help them better serve their community. This assistance can come either from grants or, in the case of daycares and similar service-based organizations, contracts.
Unlike nonspecific revenue gathered through donations, government funding is considered a distinct source of money with its own accounting and reporting requirements. These funds are dedicated to a distinct purpose and cannot be lumped together into the greater sum of an entity’s operation. Non-profits must separate funds that are received by grants and contracts from their general expenses and operational costs to maintain compliance and their tax-exempt status.
Similarly, each government grant and contract must be tracked separately from the rest. Even if the revenue for two separate grants are used to accomplish the same goal, the law and the standards of good accountability demand that each resource is independently tracked and managed.
With each additional revenue source a non-profit receives, the sheer volume of reports that must be prepared and filed increases. As a result, a key challenge is having the bandwidth to ensure every report is both prepared precisely and filed by deadline. This will often require the support of a dedicated firm that possesses the resources to maintain a proper reporting schedule.
As stated, grants and contracts supplement the income your organization receives from charitable contributions, fundraisers and other revenue sources. A common challenge is making sure there are no hurdles to tracking the revenue in a timely fashion.
With the above in mind, it is important that non-profit directors have a streamlined process in place for accounts receivable. Working with an accountant can help you determine and implement better ways of keeping accurate records on a daily basis.
Contact Us for Nonprofit Accounting
Alston & Company provides accounting support for non-profit organizations in Freehold, Newark, Trenton, New Brunswick, and all surrounding communities. We are happy to help founders and directors alike maintain accurate books and track revenue effectively. For more information about how we can help you succeed in your mission, call us and schedule a consultation today.