New business owners often try to cut costs by assuming a do-it-yourself stance, taking on tasks for which they may not be fully equipped. This approach can work for a while, but if your small-to-medium sized business has outgrown your abilities, you need professional experience and expertise to support your ability to thrive and succeed.
How a CPA Can Help Your Business
If you haven’t previously used a CPA, you may think that all they do is general bookkeeping and preparing and filing taxes. Even if those were the only services offered, they would save a significant amount of time and effort and free you up to focus on the areas of your business where you shine.
But there’s so much more to what a CPA can do than just these two tasks.
A CPA can identify areas where your company is wasting money and help you optimize areas that will increase your profitability. A qualified, experienced CPA can manage all of the financial tasks required of your business. You will be amazed at the additional time you have available when you no longer have to struggle with balance sheets and other financial documents.
Accountants are able to lighten your load when it comes to the tedium of bookkeeping, but they are also valuable sources of insight on how to improve your business’ performance. Here are a few of the areas where they can provide guidance and make a real difference.
1. Take on tasks that free you for other, more important needs
If you have been doing your own bookkeeping and tax preparation, once you bring on a CPA you will find yourself with substantially more time for the aspects of the business that inspire you. Rather than attempting to learn accounting as you go, you can focus on the areas where you shine, leaving increasingly complex accounting needs to someone who has dedicated their own professional life to those exact issues.
2. Save time
As a business owner, you have unique knowledge and abilities that are best applied to the business itself. Any time that you spend trying to puzzle over ledgers, tax forms or other financial documents is time wasted … and assigning those tasks to an experienced accountant is an investment in your business’ future.
3. Ensure compliance
Filing tax forms and preparing business documents are more than an annual exercise. They are essential to your business’ compliance with government regulations, and are only a small part of the requirements that your business may be responsible for. An experienced CPA knows exactly what your obligations are, eliminating the need for you to research (or respond to notifications of violations). Rather than you having to investigate what your obligations are – or risking a costly mistake – a CPA will ensure that you are ahead of the requirements and are fully compliant.
4. Review expenses
It’s easy to fall into bad habits and overspend when your business first starts, and the sooner you eliminate those tendencies, the sooner you’ll improve your bottom line. An experienced CPA will take the time to analyze your expenses and suggest cost management restrictions that will enhance your business’ financial wellbeing, eliminating unnecessary spending and leveraging areas where your business can realize savings or expand without incurring significant costs. Where a business owner can easily be distracted by other tasks, an accountant will ensure that bills are paid in a timely way, avoiding late penalties and taking advantage of early payment incentives, as well as other opportunities.
5. Tax preparation and strategy
Tax preparation is the task most often associated with CPAs, but there is far more to their expertise than simply plugging in numbers and calculating liability and refunds. CPAs leverage their knowledge of tax laws to minimize the amount of tax due and maximize the amount of cash that your business retains.
6. Provide guidance as you grow
As much as you want your business to grow, expanding too quickly can leave a business scrambling and unsteady, needing more employees, more space, more inventory and assets. Lack of experience and guidance during this critical period has led many businesses to fail, but an experienced CPA can guide you through this transition, ensuring that your service remains steady and your infrastructure keeps up with your activity.
7. Tracking performance
Documenting sales and other key performance indicators is time-consuming, but essential to accurately assessing your business’s performance. A CPA will not only use these records to gauge your growth but also to help evaluate the appropriate next steps to keep your business on track.
8. Advising on Business Structure
One of the most important questions that a business has to answer is whether to form as an LLC, sole proprietorship, partnership or some type of corporation. Not only can a CPA help determine which is most advantageous, they can also advise on the tax implications of your decision and ensure that you are in compliance with the requirements of your choice.
The Importance of a CPA for Your Business
When you decided to go into business, you did so with the intention of being the best you could be. Having a CPA on board to guide you through your accounting and financial decisions is a smart investment that will provide positive returns long into the future.
To find a CPA you can trust, there are several options. First, many CPAs invest in SEO for accountants which includes keeping their information up to date on directories. Consider checking a directory or marketplace like TaxBuzz or Yelp to find a CPA. Second, you can ask other business owners for referrals to trustworthy CPAs, then double check their reviews online.