It can often seem unnecessary to hire a certified public accountant (CPA) since bookkeepers and accountants are frequently believed to be the be-all-end-all for a business’ finances. However, there are certain advantages to having a CPA by your side. While we addressed some common myths about accounting in an earlier post, we thought it’d be helpful to highlight three specific ways that a CPA can help your business succeed.
Before we get into the benefits that a CPA can bring your business, it’s important to review the definition of a CPA. As previously mentioned, CPA stands for certified public accountant. The “certified public” accountant is held by individuals who have completed the exams administered by the American Institute of CPAs, as well as met their state’s ethical and experience requirements. In addition to meeting these requirements, CPAs are required to complete continuing education courses in their field to keep their CPA license.
While CPAs can fulfill the role of an accountant, they meet additional requirements related to education, experience, and ethics that make them great partners in general business matters, as well as finances.
When starting a business, a CPA can help you craft a plan based on data and experience. Given their financial expertise, a CPA can also advise you on the best investments for your business. Taking into consideration your financial capacity and possible risks associated with it, a CPA can advise you on whether or not you should take out a loan. If you decide that a loan is in the best interest of your business, a CPA can also help you prepare the necessary documents for your application.
CPAs can also analyze your business’ performance and point out key performance indicators that you can use to measure your business’ growth and success. If your business sells shares on the stock market, you must have a CPA provide audited statements so your stock’s worth is accurately represented to investors. If you require a Chief Financial Officer (CFO), a CPA can act as your CFO, advising you on all aspects of your business’ finances.
In addition to tax strategy, CPAs are qualified to represent you before the IRS, if necessary, and help you navigate IRS interactions with discretion and avoid costly missteps. A good CPA will also help you take proactive measures to eliminate all red flags in your business’ accounting practices and overall policies.
Businesses often have trouble deciding between filing as a C corporation, S corporation, Limited Liability Corporation, or sole proprietorship. A CPA can advise you on the appropriate tax structure that fits your business plans or goals. After you’ve decided on the best entity for your business, a CPA can help you gather and file the appropriate documents and paperwork in time for all relevant deadlines.
Because of their ongoing education, CPAs are qualified to help you navigate changing tax laws and business requirements. CPAs can also help you design an effective tax strategy, helping you implement business practices that maximize all of the appropriate deductions for your business. Experienced CPAs will also guide you toward automating your accounting and expense tracking so tax seasons are smoother and more efficient for both of you.