Growing your business? Work with a tax and accounting professional
As a small business owner, you probably work with your accountant during tax season, and that may be about it. But did you know that CPAs can offer you so much more? Think cash flow management, budgeting, risk management services and investment guidance...to name only a few.
If you’re just getting started with your business, working with a tax and accounting professional like a CPA or EA can be invaluable. From helping you determine the best business structure for your new venture (i.e., sole proprietorship, corporation, LLC, partnership) to guiding you on the best way to track expenses for daily business activities, these professionals can also help you with:
Creating a financial business plan.
Suggesting the best accounting software for your business.
Providing guidance on accounting-related government regulations and requirements.
Offering advice on business vs. personal accounts (and keeping them separate).
Tax and accounting professionals guide your early business decisions to help ensure your business is armed with everything it needs to succeed. And once your business is off the ground, they can help you on a consistent basis—ensuring your employees and independent contractors are set up correctly, advising you on your financial statements and reports, assisting with or taking on many aspects of payroll, and, of course, handling your taxes.
A CPA’s strategic thinking and financial expertise will help you make big strides when you’re ready to grow your business. Here are some specific ways they can help.
1. Setting goals
For your business to grow, you have to determine how you want to grow, and that starts with setting goals. Do you want to expand locations? Create and sell new products? Focus more on services? Reduce overhead costs? Tax and accounting professionals can provide insight into setting goals and help create a plan for you to achieve those goals.
2. Identifying Key Performance Indicators (KPIs)
Once you’ve identified and set your business goals, tax and accounting professionals can then help you identify the KPIs that will help you measure how well your business is performing. Consistently tracking KPIs will help you quickly identify what is and isn’t working when it comes to reaching your goals and allow you to make small adjustments along the way.
3. Creating financial forecasts
Your accounting software will give you the financial story of your past, but what about your future? Tax and accounting professionals have the skills to create financial forecasts to guide your decision-making. Knowing how your finances trend based on seasons, cash flow patterns, inventory management or pricing will help you make good decisions for growth.
4. Helping prevent an audit
Tax laws and regulations change frequently, making it hard for many business owners to keep track. Work with a professional (aka a CPA or EA) who is well-versed in the intricacies of ever-changing tax laws, so your business doesn’t end up on an IRS audit list. If you do happen to get audited, these professionals can help prepare you and guide you through it.
5. Comparing numbers with industry benchmarks
Many tax and accounting professionals use financial benchmarking analysis tools to help their clients understand how their businesses stack up against other businesses within their industry. They’ll be able to tell you if you’re performing better than your peers, if you’re charging more or less than your competitors for the same services, and where your market share stands. Knowing these benchmarks helps you make informed business decisions focused on sustainable growth.
6. Helping plan for the future you want
Do you know the future of your business? When you’d like to retire vs. when you can actually retire? Work with a tax and accounting professional to determine the value of your business so you can plan for the future. Having an estimate of how much your business is worth will help you prepare for many opportunities (e.g., retirement planning, succession planning) or life events that may come your way. Knowing the current value of your business also aids in maximizing the value of your business.
Don’t go it alone
CPAs are trusted professionals who offer in-depth experience to business owners and managers. They’re armed with financial expertise to guide you through problems and strategize solutions. If you’re ready to grow your business, don’t go it alone—work with a tax and accounting professional.