General Accounting

CPA for Small Business – When Should You Get One?

by Envoice
10 min read
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If you’re a small business owner, you may wonder if you should get a Certified Public Accountant (CPA) and what their role in a business is.

After all, you’re just starting out and don’t have much income – But does that mean you don’t need one?

In this article, we’ll discuss the benefits of having a CPA as well as when it might be the right time for your business to seek out professional assistance.

What is a Certified Public Accountant and what do they do for small businesses?

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A CPA, or Certified Public Accountant, is a professional who provides accounting and financial consulting services to businesses of all sizes. A small business owner may employ a CPA to help with a variety of tasks, including bookkeeping services, tax planning, financial management and audit support.

While some small business owners choose to handle their finances on their own, there are several advantages to working with a CPA.

First, CPAs have the training and experience necessary to spot potential problems and offer solutions. They can also save you time by taking care of financial tasks that would otherwise fall on your plate.

In addition, Certified Public Accountants can provide valuable insights into how to grow your small business and make it more profitable. They can also help you make sense of your financial records and use it to make better business decisions.

What are the benefits of having a CPA for your small business?

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If you’re a small business owner, you know that every dollar counts. That’s why it’s important to make sure you’re taking advantage of all the benefits available to you.

Accountants can help your small business save money and improve its financial stability. Here are just a few of the ways a CPA can help your small business grow: 

1. Streamlined tax preparation and filing

A CPA can help make sure you’re taking advantage of all the tax deductions available to small businesses and that your filings are done correctly and on time. This can save you money and help you avoid penalties from the IRS.

2. Improved bookkeeping and financial planning

A CPA can help you with preparing financial statements and making sure your books are in order. This can give you a better understanding of where your money is going and how your business is performing.

3. Expertise in accounting and financial planning

A CPA can help you keep track of your expenses, set up a budget, and forecast future growth.  This can give you the information you need to make sound financial decisions for your small business.

4. Access to valuable resources and networks

A CPA can connect you with other professionals, such as lawyers and tax experts, who can provide valuable resources and unbiased advice.

5. Assistance with business transactions

A good CPA can guide you through every aspect of starting or buying a small business, from negotiating contracts to setting up bookkeeping systems. 

6. Relief from paperwork headaches

Accountants can handle all the day-to-day accounting tasks for your small business, so you can focus on what you do best.

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7. Peace of Mind

Working with a CPA can give you the peace of mind that comes with knowing your finances are in order. Also, an accountant can help you identify potential financial problems before they happen.

When should you hire a CPA for your small business?

The answer to this question depends on several factors, including the size of your business, your industry, and your financial needs. However, here are a few general guidelines to help you decide if it’s time to get an accountant.

  • When you’re starting out.

When you’re starting out, it can be difficult to understand the value of hiring a CPA. In fact, many entrepreneurs don’t think about hiring a CPA until months into a business venture.

But an accountant can help you establish the backbone of your financial management. They can also help you create a business structure and make sure that your business finances are in order.

  • When you’re unfamiliar with taxes or all the forms and deadlines.

If you aren’t familiar with tax laws or have never filed a business return, it makes sense to hire someone who has experience doing so on a regular basis.

While there are many resources available online for those who want to learn how to file their own taxes, there’s no substitute for an experienced professional who knows all of the ins and outs of filing taxes for businesses. They can also keep you up-to-date on changes in tax laws that could impact your business.

  • When your business is growing fast.

The growth of your business is an exciting milestone. It’s also a good time to start thinking about hiring a certified public accountant.

As your company grows, you’ll need to pay more attention to the details of your business—things like payroll taxes and tax liability. And as you grow, your finances will become more complicated.

  • When your situation changes.

If you’ve been running your business for years and suddenly you need to make any major changes for the future of your company, then now is the time to consider hiring an accountant.

A CPA can help you navigate these changes in order to maximize both short-term and long-term success for your company.

  • When your business is about to undergo a major financial transaction

If you’re in the process of partnering with another business or opening a new branch, or if you have just received a large cash infusion from an investor or other source, it’s important to have a CPA who understands the implications of these kinds of changes and can advise you on how best to proceed.

A CPA can help you get through this process by ensuring that all of your documentation is in order and everything will be compliant with current regulations. 

Qualities to consider when choosing a CPA for your small business

Being an accountant requires more than just being good with numbers. In order to be successful in this field, one must also have strong problem-solving skills, be detail-oriented, and have the ability to think critically.

Accountants must be able to handle large amounts of data and information and sift through it to find the most important details. They need to be able to identify patterns and trends and understand how these will impact their clients. [1]

They must also possess excellent communication skills, as they often need to explain financial situations to non-financial people. In addition, they need to be able to work well under pressure and meet deadlines.

As you can see, there are many qualities that are necessary for a successful accountant..

Lastly, a very important consideration is that you feel comfortable with the CPA and they are someone you can trust. After all, you’ll be sharing sensitive financial information with them.

These are just some of the qualities that an accountant should possess in order to be successful in this demanding field. Once you’ve identified potential CPAs, set up interviews and ask each one about their experience, rates, and bookkeeping services.

How to work with a CPA for your small business

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Figuring out where to start can be tricky – Here are a few tips on working with an accountant for your small business:

Do your research.

When you’re looking for a CPA, it’s important to do your homework and look for someone who has experience working with small businesses. Ask for referrals from friends or other business owners, and check out online resources such as the American Institute of CPAs.

Get everything in writing.

Once you’ve decided on a CPA, be sure to get all the details in writing before you start working together. This includes the scope of work, fees, and any deadlines or deliverables.

Be prepared to pay.

Depending on the services you need, working with a CPA can be expensive. However, it’s important to remember that a good CPA can save you money in the long run by helping you avoid costly mistakes.

Keep communication open.

Once you start working with a CPA, be sure to keep the lines of communication open. Ask questions, provide feedback, and keep them updated on any changes in your business. This will help ensure that you’re getting the most from your accountant.

Ask questions.

If you’re ever unsure about anything, don’t hesitate to ask your CPA for clarification. It’s better to ask questions and get things right than to make mistakes that could cost you money.

Questions to ask when interviewing CPAs

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Knowing more about your potential CPA can help you make a more informed decision about whether or not they are the right fit for your needs.  Here are some key guidelines:

1) When interviewing CPAs, the first step is to ask about their credentials and education. It’s always a good idea to hire a CPA who has a valid certification or continuing education requirements.

2) Be sure to ask about their experience working with small businesses in your industry. This will give you an idea of whether or not they’re familiar with the challenges that your business faces.

3) Be sure to ask about their fee structure as well. It’s important to know upfront how much they’ll charge for their services.

4) You should also inquire about their method of accrual accounting and whether they use an accounting software program to maintain records. (2)

5) Ask about their availability. Many certified public accountants are only available during business hours, so you’ll need to find someone who is able to work around your schedule.

9) Finally, ask for references. This gives you the opportunity to speak with other business owners who have partnered with the CPA and get a sense of their level of satisfaction.

What is the average cost of hiring a CPA?

The average cost of hiring a certified public accountant depends on a number of factors, including the size and complexity of your business.

If you need help with preparation or tax advice on financial health, you can expect to pay more than if you just need someone to maintain your books.

The geographic location of your business is another important factor. CPAs in urban areas typically charge more than those in rural areas.

With all the factors considered, the average cost of hiring a CPA for small businesses in rural areas is around $35 per hour. For larger businesses in rural areas, the average cost is around $100 per hour. For businesses in urban areas, the average cost is around $200 per hour. [2]

CPAs typically bill at an hourly rate, so you’ll need to be prepared to pay for their time. However, keep in mind that some certified public accountants may offer discounts for small businesses or package deals that include a certain number of hours at a reduced rate.

Closing Thoughts

Hiring a CPA is not something you want to put off. These professionals play a vital role in any growing company’s success and hiring the right CPA could be the difference between your company’s success and failure.

Plan ahead, take your time and get ready to hire a qualified CPA. The risk of not having an accountant is greater than the cost of getting one.

Do you have more questions? Send us a message and one of our experts will be happy to help. Ready to get started with Envoice? Request a demo today!



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