You might think of a certified public accountant, or CPA, just as that smart person you call each year during tax time. If you own a small business, you may want to rethink that image. There are times when you absolutely must work with a CPA or other highly certified accounting professional. At other times, it’s simply a smart move. Partnering with a skilled financial professional to advise your business pays off in more ways than one. Here, we will talk about what a CPA can do for a small business and why you should leverage their skills.
CPAs can be found in all kinds of positions, from investigating fraud for the FBI to sitting on the boards of nonprofits. To earn the title CPA, an accountant must pass the stringent Uniform Certified Public Accountant Examination and meet certain work requirements. To keep the title, they must stay current with tax laws and maintain licensing requirements in their state.
A CPA can act as a consultant on many areas of personal and business finance. Whether you’re gathering seed funding to start a business, adding employees to your payroll for the first time, planning a merger or making a succession plan, they can provide guidance.
The U.S. tax code is complex and, while everyone seems to wish it were simpler, everyone wants to take advantage of any breaks or deductions they can. A tax professional can help you find those opportunities while avoiding costly errors. Some business owners just want to dump a pile of papers on a CPA’s desk and flee, hoping for the best.
The goal of filing your taxes should be more than to simply survive it with as small a bill as possible. A real tax plan enables you to make good choices throughout the year so that you not only minimize your bill but prepare to pay it. Fewer surprises and a clear strategy help business owners sleep better at night. This is where a CPA can work with you on an ongoing basis.
Remember how we said there are times when you must have a CPA? The primary example of a time like this is during an audit. Your business may need its financial statements audited or verified in order to apply for a loan or grant, or to submit an RFP.
In addition, if the IRS decides to revisit one of your past tax returns, you will need a qualified Tax Representative. You can represent yourself before the IRS during an audit, but just because you can doesn’t mean you should. Getting through an audit unscathed requires training and experience.
In the event that your case goes to court, a CPA or an EA (enrolled agent) is qualified to represent you. EAs are CPAs with even more qualifications. Both are highly skilled at interpreting tax codes. You could wind up in tax court if the IRS says you have underpaid and you wish to appeal. A CPA on your side increases your odds of success.
Regardless of your size, industry, or location, you need some kind of financial guidance. Eventually, you may choose to hire a fractional or full-time CFO, or you might never reach that point. For a privately owned, fully on-shore small or mid-sized business, hiring a CFO would be overkill.
At the other end of the spectrum, some businesses get by with a part-time bookkeeper to handle things like invoices and payroll. Even if you employ a bookkeeper, someone in a financial advisory role--who could be a CPA--can offer big picture thinking and solid advice. You might think of this person like a board member, contributing to your strategic direction.
At BAAP a full team of CPAs and EAs is ready to guide your business through much more than just filing taxes. We look at the future to find places where you can maximize profits and reduce your tax burden. Give us a call today to see how a CPA can make a difference for your small business not only at tax time--but all the time.