If you’re starting a small business on a fixed budget, you’ve probably spent some time trying to figure out where you can cut costs and do more on your own in order to stretch the funds you have available.
One area where you may consider doing it yourself instead of farming it out is accounting. If you have an accounting background and a solid understanding of business finances, then this may be a good place to cut costs.
However, if you don’t have experience managing the books of a business and expect to learn as you go, you should think before you leap. Managing your own accounting system incorrectly can hurt your business not only now, but in the long-term as well.
A CPA can offer advice and expertise to boost your business’s growth.
Here is a rundown of what a CPA can do for a small business owner. Review this list carefully, especially if you’re still unsure why a CPA may be a good member to add to your small business team.
During the Start-Up Process
When you start a business, there are a number of things you need to do and systems you need to set up in order to create a successful foundation. Here are some ways an accountant can help:
1. Determine the best business structure (i.e, sole proprietorship, LLC, corporation, partnership) for your situation
2. Assist with financial analysis in your business plan
3. Give advice on the type of accounting software you may need
4. Offer advice and assistance on opening a business bank account
5. Make sure your accounting procedures comply with government regulations and requirements
6. Give advice on how to track expenses during your daily business activities
7. Explain the importance of keeping personal and business expenses separate
During Your Regular Business Operations
Once your business is up and running, you will need to maintain the accounting system that your accountant helped you set up. Here are some specific actions your CPA may take to assist you on an ongoing basis:
8. Help ensure that your independent contractors are classified as such (and not employees) by the IRS
9. Explain your financial statements so you can understand the nuts of bolts of your business
10. Oversee company payroll and payment processes
11. Give advice on estimated tax payments you should make during the year
12. Find out when and to whom you should send W2 and 1099 forms
13. Close out your books and create financial reports at the end of the year
14. Compile and submit taxes, financial reports and all necessary paperwork to the IRS
During the Business Growth Stage
When you are ready to grow your business, your accountant can be an integral resource to help with the process. Here are some things a CPA can do with growth:
15. Help you determine areas for growth by providing insight on cash flow patterns, inventory management, pricing and business financing
16. Provide advice on property and equipment leasing and purchase
17. Help you prevent getting audited by the IRS
18. Prepare you for and guide you through an audit if it happens
19. Create financial forecasts so you can make better decisions for future growth
20. Work with you to create a business budget that will support your goals
21. Give advice and resources to help with the sale of your business
These are just some of the ways a CPA can work with small business owners. You can opt to hire one for all of your financial activity, or you can choose a combined approach that limits his or her activity and reduces the expense. In the end, the most important thing you can do regarding your business finances is to know when you need to enlist the help of a professional who will help maintain the fiscal health of your business.
Call Williams & Kunkel CPA today in Flower Mound at 972-446-1040 to have a chat and find out how we can help.
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Source: The Balance