Business owners have many different aspects to manage to make sure their business operates smoothly, finances being just one of them. Small business owners should consider hiring a certified public accountant to manage the business finances for them. Perhaps a small business believes a certified public accountant isn’t in the budget, or not necessary for their size. All businesses should have an accountant to take care of loans, file their taxes, and manage financial records to avoid mistakes, debt, and legal complications. Hiring a professional allows business owners to focus on other aspects such as marketing, and customer service. And most importantly, it serves as a key step in the expansion and growth of the business.
Why a CPA?
Certified public accountants (CPA) are more qualified than regular accountants.CPA’s are pre-screened, highly trained, experienced, certified to perform tax audits, and must pass a state exam. A Certified Public Accountant must also continue education to maintain their license which ensures best practices and high expertise.
Bookkeepers are not accountants.
Many businesses believe they do not need an accountant because they have a bookkeeper to help organize finances. Bookkeepers manage short term finances while accountants manage long term finances. Accountants also prepare tax documents, prepare loans, make recommendations,provide financial analysis, and act as the representative for the business. It can even be beneficial to have both a bookkeeper and a CPA as the bookkeeper will record purchases and payments for the accountant to reference.
A business should be set up properly to have a successful start.
Business owners shouldn’t wait until they need help to figure out their business plan. When starting a business, a CPA can help determine the business legal structure, business plan, locations, government regulations, and bank accounts. Starting out with a strong foundation will allow the business to more easily grow and expand.
CPA’s eliminate error and help organization.
A certified public accountant will keep finances highly organized. They will make sure that employees and private contractors are classified properly, review payroll and payment processes, and determine when to send out tax forms. If a business requires an audit, a CPA will ensure that the records comply with the Sarbanes-Oxley Act and GAAP to avoid fraud.
A proper financial statement will help obtain loans.
Many small businesses have to ask for a loan at one time or another. A statement prepared by a certified public accountant can increase the chances of getting approved.
Many small businesses are not properly budgeted or fall short.
Failure to meet budget goals will hinder the business’s success. This is a common problem as about half of all small businesses fail within the first five years. Having a CPA will help businesses stick to budget and correct errors before they fall into debt.