When’s the Best Time to Hire a Small Business Accountant?
June 18, 2018 by Gordon Advisors
Managing the financial and tax aspects of a small business can be daunting, especially when added to all the other responsibilities of running a business. And the repercussions of errors made by non-experts can have long-lasting impacts. While you may be able to manage your company’s basic bookkeeping, there will be times when you should consider hiring a certified public accountant (CPA) and save yourself from making costly mistakes. Here are four occasions when the services of a CPA can make a big difference in the success of your small business.
4 Times to Hire a Small Business Consultant
1) Before you set up your business.
Every decision you make when planning your business will have an impact — negative or positive — on its future. For example, do you know the best structure for your company (e.g., LLC, sole proprietorship, partnership, or corporation) and why that structure is better than the others? If not, a CPA can explain the differences as well as the pros and cons.
Another essential ingredient that is often misunderstood is the business plan. It’s not just a document that makes you look like an official business owner; it’s a road map for the future of your company! At a minimum, you will use your business plan to run and expand your company and to attract investors or borrow money, so having the insights and experience of an expert CPA are key to a viable plan.
Other aspects of establishing your business that a CPA can assist with are the different banking options that you should consider, financing your immediate and long-term business needs (and hopes), and in some cases regulatory information that applies to your business and/or your industry.
2) When preparing your business taxes.
Unless you have read the tax code, you should seriously consider having a CPA handle your taxes. Period. At last count, the tax code was about 70,000 pages, and 2018 presents special issues due to the Tax Cuts and Jobs Act of 2017 (TCJA), which takes effect in the 2018 tax year.
But a CPA can help with more than completing your taxes; they can explain the changes the TCJA presents for business owners such as deductions for employee meals and others that can cost you if you’re not up to speed. Not only can this knowledge help you protect your business, but there are plenty of changes also affecting personal taxes that may come into play for you as well.
A CPA will be up to date on all the changes, be able to inform and instruct you about the options or lack thereof and help you file taxes that are correct, eliminating the potential for fines and penalties. And one more thing to consider is the growing number of people and businesses affected by tax scams, something that will be avoided when your taxes are filed by a CPA.
3) When a tax audit is upcoming.
If you have never been audited by the Internal Revenue Service (IRS), you’re lucky. But over the lifetime of a successful business, the odds are good that you will eventually receive a notice of audit in the mail (never by telephone) and will have to comply. The smartest thing you can do when you receive a notice of audit is speak with a tax expert who has experience working with the IRS on behalf of clients like you.
For example, a CPA can assist you with gathering the necessary records, submitting them to the IRS, attending in-person audit meetings, and so on. Remember, CPAs know the drill, they understand how the IRS audits different industries as well as different tax issues, and they know well the rights taxpayers have under the law. A competent and qualified CPA can be a valuable resource, someone looking out for your business and you.
4) When planning for growth.
Deciding to expand your business can be for many reasons but should be guided by the sound observations and advice of a financial expert like a CPA. Among the many things a CPA can assist with are:
- Assessing what growth will look like across your company’s. They will examine pricing and cash flow patterns, evaluate inventory management strategies, and examine financing options.
- Determining if and how much physical property and/or equipment will be needed and the best purchase or leasing opportunities.
- Examining your current business plan and budget to determine any necessary changes or considerations.
Creating, managing and sustaining a successful small business is several full-time jobs even for the most adept entrepreneur. Most business owners are experts in their field, but not necessarily in the intricacies of finance and taxes. If you prefer to use your limited resources to do what you do best, contact Gordon Advisors and find out how a CPA can help you and your business thrive.