Every successful business needs capable leadership, constant innovation, and some level of financial management to ensure that deadlines are met and budgets are followed. According to the Small Business Administration (SBA), small businesses are the “backbone of our nation’s economy” and account for more than half of all private-sector jobs.
Consequently, small businesses aren’t just responsible for the livelihood of their owners and employees; they’re integral to our financial stability.
However, the daily demands of running a business can make small business owners feel like they don’t have enough time to tend to their personal financial needs. In turn, they may feel overwhelmed or unclear about what steps to take next to manage their finances effectively.
In many cases, the SBA estimates that entrepreneurs may be overlooking the value of hiring a certified public accountant (CPA) to help ease this burden. Here are four reasons small business owners may want to consider hiring a CPA:
CPAs are tax experts
Taxes can be confusing, and since taxes can account for a large chunk of a business’ expenditure — 40 percent — it helps to have someone on your side who is an expert. As a CPA, you are legally allowed to represent clients in matters related to the Internal Revenue Service (IRS). This means that you can file paperwork on behalf of clients, represent them in audits or appeals hearings, and make sure they are in compliance with the IRS’ tax code.
CPAs can help with business decisions
Accountants keep up with all the latest legislation and changes in the tax code, which can help you make decisions regarding your business. They’re also well versed in the latest accounting software, both for businesses and individuals, to help you keep your financial records organized.
Moreover, CPAs can help you identify potential tax deductions or write-offs. For example, if your business provides child care services to employees onsite, you may be able to write this off as a business expense. Hiring a CPA can help you examine all potential deductions and give you the best outcome for your business.
CPAs can help you with financial statements, audits, and year-end reports
Financial statements are often used by lenders and investors to determine a company or business’ creditworthiness. In short, they can be a determining factor as to whether or not your business is able to secure funding.
This is what makes CPAs professional business bookkeeping experts; they can make sure your financial statements are in order and that your books are always up to date. They can also help examine your business’s practices and see where potential problems may arise, allowing you to stay one step ahead of issues.
CPAs can help startups
If your business is just starting out, hiring a CPA can help you navigate the initial stages of getting your business off the ground. For example, a CPA can help you determine what your company’s net worth is, which can, in turn, influence your credit score. They can also assist you with setting up payroll and tax withholding, as well as help you establish a system for organizing critical documents.
In addition to saving time and identifying deductions, hiring a CPA can benefit your business by ensuring that all of your bases are covered. Whether you’re planning for the short or long-term, CPAs can help you take the guesswork out of your finances so that you can focus on growing your business.