Why Small Businesses Should Hire a CPA
According to SmallBusinessChron.com, “The importance of small business to local communities is emotionally rooted in buying and selling with friends and neighbors. The importance of small firms in rural areas and big cities also is seen in the economic benefits of shopping locally. In some towns and villages, a small business is the only type that can survive while serving a reduced population. In a big city, small businesses often offer a more diverse inventory or specialize in providing unique or personalized customer experiences. Small businesses also present new employment opportunities and serve as the building blocks of the United States' largest corporations.”
Cash flow issues and regulatory burdens can be challenges for small business. The benefits of freeing up cash flow and having the infrastructure in place around operations, bookkeeping, forecasting, and accounting can better position a small business for success. The following are steps that small businesses can take to maximize the efforts of a Certified Personal Accountant:
IMPROVE OPERATIONS & PUT SYSTEMS IN PLACE- By establishing infrastructure and putting systems in place out the gate, it can streamline the operations of your business. Hiring a CPA can support your system design efforts and hold you accountable to adhering to those systems.
Setting up your accounting correctly and working with a CPA to help you chose the right software can help support report accuracy. Activities such as backtracking, cleaning up disorderly books, and switching systems can take away from your valuable time as a business owner.
KEEP TRACK OF YOUR BUSINESS RESULTS & NUMBERS- Having an expert set of eyes trained on monthly reports like your P&L can be invaluable. Though many software programs can generate reporting, a CPA can perform an analysis and best manage time for maximized results.
MAKE FACT BASED DECISIONS & MEET DEADLINES- A CPA can support your company by preparing your documentation accurately and in time for critical dates so that you can make informed decisions such as hiring, purchases, and more. When it comes to closing out your books at the end of the year, a few small changes can make a big difference to your bottom line. A CPA can be one of your best assets in this process. Local regulations, tax rules, state and federal laws that relate to your -day-to-day operations, all change often. Knowing the financial and tax implications of all these changes is part of the business of accounting. It’s another area where a good CPA can save you hours of reading and search for the best, most up-to-date information.
Managing Cash Flow- As mentioned earlier, and as a business owner knows, cash flow can make or break any business. A CPA knows what reports need analyzing, when, and what the red flags are in this area.? Your CPA is there to help you minimize unwelcome surprises and plan ahead for maximum profitability.
HANDLING AUDITS & AVOIDING COSTLY MISTAKES-In the event of an audit, a CPA can take the burden off your shoulders and guide you through the process as painlessly as possible. Having a CPA who knows your books well, and having an accounting system in place that was set up to conform to accounting standards can set you up for success. Staying in compliance when tax rules change many times per year can be challenging, especially at the state level. A CPA who keeps your business in compliance can save you expensive fines and penalties, as well as hours of labor. Hiring a CPA is the best way to ensure you’ll have the information you need. Mistakes like non-compliance missed due dates, and cash shortfalls are much less likely to be in your future when you hire the help and expertise you need.
The right CPA and an orderly accounting system will save you time and money in the long run, allow you to put your energy and focus on what you do best, and position your business for maximum profitability and success.
PAYING EMPLOYEES PROPERLY
One area where busy business owners can often benefit from the experience of a CPA is in the area of payroll. CPAs often see the same mistakes when it comes to paying employees correctly, such as assuming overtime pay won't be required. A good CPA knows what to look out for and will advise you on your specific situation. Making sure each worker is classified correctly, as well as knowing when an exemption applies and when it does not, are examples of the expertise you can rely on when it comes to payroll challenges.
What is the top cause of small business failure in this country? Cash flow problems. What do the majority of small business owners report as one of their biggest challenges? Regulatory burdens.
Fortunately, small business owners can find a significant ally to help with both of those things by hiring a CPA.
Data Source: https://lumatax.com/blog/reasons-to-hire-small-business-accountant/