Smart business owners know their products, services, markets and customers inside and out. Yet that doesn’t necessarily mean they’re experts in business finance, taxes and IRS regulations. While these disciplines grow increasingly complex every year, business owners must make intelligent decisions about each one in order to keep their businesses viable.
Certified Public Accountants – CPAs – are experts in all facets of business finance, taxes and IRS regulations. A qualified CPA can help keep your business on sound footing in the short term – and help it grow over time. He/she can help you navigate financial and tax challenges large and small; maintain sound financial practices; offer strategies and advice that can provide competitive advantages; help you avoid costly pitfalls and mistakes; and even refer new business to your doorstep.
A small business actually is the type of business that can realize the greatest benefits from working with a qualified CPA. Still, small business owners seem to have a multitude of reasons for not retaining a qualified CPA: “I can handle our finances myself.” “We’re too small.” “I have a part-time bookkeeper.” At Machen McChesney, we’ve heard them all.
Consider some of the many benefits that CPAs offer small business owners:
- Trusted advisory services – A CPA can help a small business owner navigate a maze of regulations and requirements from not only a federal perspective, but state and local perspectives as well. A small business may be subject to sales and/or use tax, payroll taxes (at the federal, state and local levels) or other regulatory requirements. In addition, as a business grows and evolves, a CPA can act as a strategic advisor by creating or updating the business plan, budgets and forecasts on a periodic basis. CPAs can work with attorneys to determine the most appropriate form of business to establish; he/she can work with bankers to obtain financing; and he/she can also work with government offices that regulate small businesses at the county and state levels.
- Business and industry expertise – A small business owner’s scarcest resource is time. As we suggested above, small business owners cannot be experts at everything. Rather, they should seek out a CPA with experience or expertise in their industry. Doing so allows them to focus on running and growing their business. CPAs can provide knowledge and experience that they have obtained from working with other clients in the same industry, or similar industries. They can provide benchmark statistics, key performance indicators and dashboards to help a business owner analyze his/her business and avoid the mistakes others have made before them.
- Accounting and recordkeeping best practices – CPAs can assist small business owners in selecting the appropriate accounting and recordkeeping systems that best fit their needs. Using an accounting system with which a tax preparer is familiar will make a business’ tax preparation easier at year-end. In addition, a CPA can assist a business owner with setting up their chart of accounts in order to provide the most appropriate financial information for analyzing their overall financial position, cash flow monitoring, forecasting and budgeting. CPAs can also monitor and provide input into the day-to-day accounting functions performed by bookkeepers and data entry clerks. This helps to ensure accuracy of financial records.
- Referrals – A CPA can be a small business owner’s best and most reliable referral source. CPAs work with a variety of bankers, payroll companies, insurance agencies, attorneys, and human resource and benefits specialists. They can recommend the best fit for the business and industry and act as a liaison between the service and the business owner to ensure that the best interests of the business are kept in mind.
- Income tax expertise – Most small business owners do enlist the services of a CPA for preparation of income tax returns on an annual basis. However, consistent contact with your CPA throughout the year will ensure a smoother and more accurate income tax return process. In addition, tax planning can be done throughout the year, as opposed to after the year has ended, when opportunities are less available. When your CPA is intimately involved in your business, he/she is better able to identify and implement income tax reduction strategies; leverage all credits available; and analyze decisions from a tax perspective and a business perspective.
Certified public accountants can be a tremendous resource to any small business, from those just beginning operations to established enterprises. Building and maintaining a close working relationship with your CPA will help to ensure the success of your business, and can save your business money in the long run.
For more information on business advisory services, please contact Michael D. Machen, CPA, CVA at (334) 887-7022 or please feel free to leave us a message below.
