According to a Palo Alto Software survey, only 33% of small business owners have bookkeepers. What’s more, only 29% hire CPAs (Certified Public Accountants). And yet, CPAs can be integral to your small business — not only when you’re starting out, but also when you’re trying to keep your business afloat. Here’s why your small business might need a CPA, as well.
If you’re about to start a new business, it can be especially beneficial to consult with a CPA first. Should you set up your business incorrectly, it can cost you a lot to fix it. A CPA can help you with the legal structure of your business, such as whether you will be a corporation, LLC, or sole proprietor. You may have to pay more later to change licenses, insurance, or banking if you need to change the structure.
Preparing and filing taxes for a business will be much different than doing personal taxes, especially if you have employees or have customers in other states. A CPA can prepare your business tax documents, file your return, and even advise you on ways to reduce your tax liability. A CPA will also be aware of any tax changes and can act as a representative if you’re audited.
CPAs can do more than your taxes. They can keep a general ledger; prepare financial statements; offer monthly, quarterly, or annual bookkeeping; set up an accounting system; budget and forecast cash flow; and provide payroll services for your business. They can also offer valuable financial advice for new businesses. It pays to work with one person who can do it all.
If you decide to make a big change — such as a move, merge, business purchase, or closure — you will probably want to consult with a CPA. There can be tax implications for your business and even for you as an individual by making such a big change. CPAs can analyze financial records or verify assets if you want to acquire a new business. If you’re planning to sell, they can help you prepare the financial records and give you the fair market value of your business.
While many small businesses attempt to do their own taxes or their own bookkeeping, a CPA could actually save them time and money. Hiring one, whether you’re just starting a new business or have been running a business for years, can help you make difficult financial decisions and help you plan for the future of your business.
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