At some point in their careers, most savvy business owners come to learn that CPA services add value well beyond tax season. A CPA can help to support your small business with financial decision making, tax planning, risk management, and a strategy for reaching your personal goals. Think of your CPA as your overall financial expert who also takes care of your tax return. Below are five ways a CPA can support your small business beyond tax time.
Preparation for funding rounds
If your business is just getting off the ground, or in a period of growth, you may need to acquire additional funding. Preparing to apply for a business loan, or raise capital from investors, can be a whirlwind, oftentimes filled with a lot of closed doors before you find the right solution. If you don’t go in prepared, the process can be disheartening—but you don’t need to do it alone. A CPA who is experienced in your industry can help to ensure you are prepared with the needed financial statements and an understanding of your business finances. CPAs can also help business owners complete loan applications, ensuring they have the best possible opportunity to receive a loan. A business CPA can also assist business owners with preparing for investor meetings, offering the knowledge and preparation needed to stand proud and confident when pitching to investors.
A CPA firm can help busy business owners with the day-to-day operations of running a business. Bookkeeping can be a time-consuming task for business owners, especially when they’re trying to do it all on their own. Expense entry, payroll, bill pay, reconciling accounts, and inventory management all are necessary to keep the business running and on track. Having your CPA manage your books can prove to be beneficial when you have additional needs because they already have access to and an understanding of your business and financial goals. As a bonus, when your CPA firm manages your bookkeeping, tax time becomes a relative breeze.
Generating financial statements
Whether you need financial statements to apply for a loan, raise capital, bring on a business partner, get through a merger or acquisition, or simply gain insight into your business, a CPA can help you create and review those important documents. A CPA can create cash flow statements, an accurate P&L statement (sometimes referred to as income statement), balance sheet, and other reports your business may need. Having a bulletproof profit and loss statement can greatly improve your odds of getting a loan, and sometimes this takes a more personal touch than accounting software can provide. That said, a CPA will use the data from you cloud-based accounting apps, such as Xero, to create reports, so it’s important to have that information up to date. They can then take the time to sit down with you to help you understand what the numbers are really saying, how it affects your business, and offer recommendations on how to improve your business financially.
Tax strategy and projections
Ideally tax planning is a year-long activity. Having a CPA can not only assist you with preparing and filing your tax return, but also in creating a tax strategy and projection. A tax projection can help to calculate estimated taxes that are due on a quarterly basis, as well as being aware of what tax bracket you may be in depending on the business legal structure. Your CPA can also help you determine whether a change in entity type would benefit your business goals from a tax standpoint. A tax strategy can ensure that you are taking full advantage of any deductions and credits that the business may be eligible for. This includes any last-minute moves to reduce your taxable income in a financially fruitful year.
Planning for retirement
Too often, CPAs see business owners putting the business first, reinvesting everything they earn right back into the business. They fail to prioritize their own retirement strategy in the midst of the day-to-day demands of running a business and end up falling far behind in their retirement savings. We also see business owners planning to use the future sale of the business as a source of retirement income. While proceeds from a successful acquisition can be a portion of your retirement plan, your retirement income should not depend solely on the successful sale of your business.
Your CPA can help you find opportunities to reinvest in your business, all while working towards a healthy retirement savings. In most cases, retirement contributions can be a tax deduction. There are a variety of types of retirement savings options for business owners, and a CPA can be a helpful resource in developing a strategy that keeps your long-term financial goals and business growth in balance.
Keep in mind that CPAs are financial experts. They have a deep understanding of business and personal finances, with a focus on tax code and law. As a small business owner, hiring a full-time financial expert may be beyond of the budget, and frankly not even necessary. By seeking CPA services for business, you can access the financial expertise without the financial commitment of a full-time team member.
Our business CPAs and outsourced CFOs have decades of experience working with business owners across many different industries. Our team approach means that a business owner gets the experience of the whole firm, but the personal experience of working with their trusted advisor. If you’re looking to build a relationship with a CPA firm that takes a team approach to helping clients with tax compliance and planning, as well as cloud-based bookkeeping and accounting services, send us a message to schedule a consultation. CPA services for business go far beyond your routine annual tax return.