What Your CPA Should Be Doing for Your Small Business

depositphotos 347009740 xl
Author Picture

Launching or starting a small business or other enterprise takes time and effort. Company planning requires tracking your gross revenue and revenue streams, income taxes, company assets, financial accounts, each employee on payroll, and more.

This process can be challenging for new and veteran business owners alike. This is why you should always engage a CPA to support you and your small business.

depositphotos 347009740 xl

What Should My CPA Be Doing for My Small Business?

A CPA can manage revenues and meet tax due dates. The right CPA eliminates several burdens from your company.

Their services help small businesses avoid legal issues, such as an audit. Moreover, they maximize the company’s tax return and avoid any payment fees.

What Is a CPA?

A CPA is a certified public accountant who must have an accounting degree and five years of experience. To become certified, a CPA takes a rigorous exam consisting of four parts covering accounting and tax-related fields.

This designation allows CPAs to manage tax returns, company evaluations, etc.

What Is a Certified Public Accountant Responsible for?

The correct CPA thoroughly engages with your small company. A CPA’s services include:

·       Filing crucial tax documents before any strict date

·       Providing guidance on tax audits

·       Helping with merger and acquisition difficulties

·       Managing any financial account

·       Determining any applicable tax deduction

·       Ensuring your cash flow remains healthy

·       Drafting any related financial report, such as a profit and loss statement

·       Identifying issues affecting your sales

CPAs aren’t limited to these services. When an owner wants to tackle a larger project involving more obligations and liabilities, a CPA can help.

9f7bc84b c617 43ec 8c91 02545c73ec0c

What Should a CPA Do for My Small Business and Income Tax?

Companies should maintain regular communication with their CPA. While you don’t need daily contact with your CPA or agency, it’s essential to access them whenever you require their services for your account.

At a minimum, companies should contact their CPA quarterly. A CPA can help manage profit, pay any outstanding bills, and do tax planning and filing.

How CPAs Help You Understand Tax Law

While a CPA isn’t a financial planner, their experience helps companies navigate tax law complexities. For example, a CPA ensures you pay the proper sales tax on your next project.

A certified accountant helps small companies and taxpayers avoid overpaying on income tax or a bill. Consequently, they keep you from running into government issues.

When a business owner takes out a loan, they will need to answer to financial institutions and other organizations. Applicants are responsible for explaining their financial statements, why they took out a loan, why they wrote off certain expenses, etc.

Knowing how to briefly explain the ins and outs of your company at any given time is challenging. Having a third-party CPA prepare your financial statements and be available to answer any questions the lender may have makes the process much easier. 

How Compilations Help Handle Financial Statements

Compilations are one of the most vital tools CPAs use. These services help owners manage their money, sales, credit, and financial statements.

A compilation includes a company’s financial statements and other prudent information. Depending on the size and scope of the company, a compilation can range from one page to 20 pages or more.

Composing your accounting compilation requires your CPA to explore all your financials, expenses, and other data. A company owner can send this compilation in advance to any financial institution or the Department of Revenue.

Having every expense, financial statement, and payment itemized allows an owner to calculate future income opportunities. After paying a bill, an owner can quickly notice room for expansion.

At a minimum, a compilation is a robust accounting tool. It helps you double-check that your revenues, sales, and income tax fulfill strict government requirements.

To keep their CPA license, a CPA must continue taking CPEs credit courses. These studies keep them informed of new changes to current laws and regulations.

What Shouldn’t a CPA Do for a Small Company?

Before searching for a certified accounting team online, you need to know what a CPA shouldn’t do. It’s crucial to understand which accounting service or services are equal to your needs.

Knowing the help your company needs can help you save cash and better manage your money. 

When considering what a CPA should and shouldn’t do for you, it’s important to make a distinction between an individual working as a CPA and a large accounting firm. Typically, CPAs are not really going to wanna do the bookkeeping or profit planning or any of those types of things.

Alternatively, a larger CPA firm may offer those services.

Regardless of their size, most paid CPAs provide the following benefits:

·       Helping you prepare and file your taxes

·       Income tax planning

·       Helping you maintain adequate cash flow

·       Putting together accounting compilations

·       Handling liabilities and other related responsibilities

·       Providing tax advice before spending money on large purchases or taking out loans

Do You Need a CPA for Your Small Business?

For handling your income tax, filing tax returns to the Department of Revenue, managing your cash flow, and having a comprehensive tax report, a CPA can significantly help. They provide many benefits and resolve issues that affect small companies the most.

Navigating tax requirements is tough, especially when dealing with multiple assets and sources of income. Trying to file and pay taxes online requires accounting expertise that not every company owner has.

Besides lacking the knowledge, these services might be in your best interest due to time.

What’s the Sign It’s Time to Hire a CPA?

Hiring a CPA is in your best interest when considering starting a company. They can help you decide your company’s structure before putting employees on payroll. That is, they can help you determine if your enterprise better fits an LLC structure versus a sole proprietorship or some other formation.

How to Find the Right CPA for Managing Income Taxes

To manage and file returns often requires expertise beyond an online tax filing tool. Likewise, managing cash flow requires an expert touch.

Before you pay a CPA, qualities you should look for include:

·       Someone with years of experience

·       Someone with experience in your industry or department

·       A CPA available on short notice

·       Someone with whom you can maintain a good relationship

Why Margin Authority? 

At Margin Authority, we collaborate with your CPA to help you manage your company’s financials for faster, more profitable, and more efficient business decisions. From financial risk analysis to cash flow optimization, our team is here to help your business leap forward.Ready to achieve your business goals? Request a consultation today.

About The Author

Scroll to Top