What Does a CPA Do for a Small Business?

If you are a small business owner, you are stretched in every direction – Developing your product/service, offering good customer service, hiring talented staff and staying on top of your finances. Thankfully, you can find an experienced CPA to handle all the intricacies of business accounting.

In this article, we will look at the many functions an accountant may play to improve the financial aspects of your business.

What is a Certified Public Accountant

A Certified Public Accountant is a professional who has met the education, experience and licensing requirements of their country or state for CPAs.

Some of the most well-known certifications are offered by the American Institute of CPAs (AICPA), the Chartered Institute of Management Accountants (CIMA), and the Institute of Chartered Accountants in England and Wales (ICAEW. [1]

Certification is usually offered after at least four years of work experience in either public or private accounting, auditing, or taxation. It is important to note that not all accountants are CPAs. Anyone can call themselves an accountant, but only those who have passed rigorous exams and years of continuing education courses can be certified to offer CPA services.

Do you need work experience? See How to Get Accounting Experience – 6 clever ways.

What Are The Roles Of a CPA

CPAs can specialize in various fields of accounting. They have a hands-on approach and are involved with clients’ interests on multiple levels, allowing them to build strong relationships that are vital to their success.

Here is a list of the duties and competencies of a CPA:

• Analyze financial records to check a client’s financial status and identify opportunities for improvement.
• Proactively examine how the business can reduce expenses, increase profits, and save money by using the right financial tools.
• Prepare bank reconciliations for clients, and balance their checkbooks.
• Prepare financial statements and reports, such as balance sheets and profit and loss statements.
• Record business transactions and key daily worksheets in the general ledger system to ensure that all transactions are accounted for and recorded correctly.
• Conduct cases involving audits of company accounts and business financial statements to ensure all documents are accurate, completed promptly, support business objectives, and comply with government regulations.
• Provide accounting guidance on various transactions, including contract reviews, capital purchases, leases, disposals, and vendor negotiations.
• Review employee financial reports for compliance with company policy and ensure that the company is not paying for personal expenses.
• Evaluate internal control systems for efficiency and recommend improvements in accounting procedures (such as metrics for tracking costs) when necessary.
• Prepare tax returns (including corporate income taxes and payroll taxes) and state and local sales tax reports.
• Forecast and re-calibrate budgets periodically based on projected revenue from existing customers or growth plans for expanding into new businesses.
• Collaborate with clients to set financial goals. CPAs have a deep understanding of financial principles and use that knowledge to guide their clients.

Benefits of Hiring a CPA For Small Businesses

One of the main reasons why small business owners hesitate to hire an accountant is the expense. However, not hiring a CPA could be far more costly in the long run.

Here are seven reasons why employing a CPA for your small business will be beneficial for your business growth:

1. Understand Your Business On a Deeper Level

A CPA can assist you in getting a better sense of the costs associated with running your business and what is required to make it profitable. They can also help you make more informed decisions about where to invest your money and save you from making expensive mistakes that could cost you down the road.

Although you are the driving force behind your business, there are still many things that you may need to learn about the day-to-day operations of your business. A CPA can help you uncover these unknowns.

2. Grow Your Small Business

It’s a challenging and highly competitive world for small businesses battling daily to stay financially viable. This is true whether you have a physical store, an online business, or run a service business.

A CPA can help you unlock the potential hidden in your business. They can give you a fresh perspective on where you are, where you want to be, and how to get there. If you have been struggling to make your business profitable, then it might be time for an outside opinion from a CPA.

3. Get Expert Help

When you hire a CPA, you’re not just hiring someone who knows how to take care of the basics; you’re hiring an expert who can help you with overlooked details and make a big difference in your business.

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A CPA has the expertise to help you with everything from bookkeeping and tax advice to financial analysis and forecasting. CPAs understand how to use accounting software and are updated with new tax laws, so you can ensure that your taxes are filed correctly.

4. Be Confident In Your Business Decisions

Confidence is the key to success, and it’s something we can all learn. You know your goals and how to get there, and you can see the progress you’ve made.

But sometimes, when you’re staring down the barrel of making a big decision, whether it’s hiring a new employee or signing a lease on office space, you may start second-guessing yourself.

But having a CPA on your team can help you stay confident in your decisions, even during tough times. Your CPA will be one of your trusted advisors, and they have the experience to guide you through any situation.

They’ll provide advice based on their knowledge of the industry, laws, accounting standards, and practices, and they’ll provide it with a proper risk management assessment.

5. Keep Informed About Tax Law Changes

Taxes changes constantly. The tax changes can be challenging to navigate, and even more so for small businesses that don’t have the resources of larger companies. Fortunately, there are ways to stay informed about tax laws, including relying on the advice of a qualified professional.

Certified Public Accountants are tax experts who can help you examine every opportunity to minimize tax liabilities and understand how changes may affect your business expenses. They can help you take advantage of new opportunities to reduce owed tax while avoiding pitfalls that could result in fines or penalties.

6. Competitive Advantage

When you hire a CPA, you gain a competitive advantage. Other small business owners that do not have a CPA on their team are wasting their time and effort trying to get ahead in keeping their books in order.

On the other hand, you will be able to focus on growing your business, provide a better service to your customers, and keep up with the latest trends and developments. This can be the difference between success and failure, especially for small businesses.

7. You’ll Have Peace Of Mind Knowing Your Finances Are In Order

Hiring a CPA can reduce stress levels and burnout for you and your employees. This will lead to a better working environment for your business, which can help increase productivity and reduce turnover rates.

Lastly, by having peace of mind, you will be able to spend more quality time with your family and friends, which is something you deserve after all the hard work you’ve put into making your business a success.

How To Find the Right CPA for Your Small Business

Trust is a big factor when it comes to finding the right CPA for your small business.

This is why you should look for a CPA that not only offers affordable rates but someone who can ensure your business’ success and growth.

Here are some tips on how to find a competitive accountant:

Ask Friends and Family

If you know someone who has used a CPA before, ask them if they can recommend one. You can get their contact information from them directly or from their website if they have one.

Search Online

There are several online directories or websites where CPAs post their services, such as the National Society of Accountants or LinkedIn.

Some states also have state-specific sites like the Massachusetts Board of Public Accountancy’s website. It lists all licensed CPAs in the state and how much they charge, so you know what price range fits best within your budget constraints. [2]

Try A Referral Service

Some companies will find qualified candidates on your behalf. They will screen them and then provide those names to you so you can make an informed decision on which one might fit best into your goals and vision as a business.

What To Consider Before Hiring A CPA For Your Small Business

When you’re looking to hire a Certified Public Accountant (CPA) to help manage the financial side of your company, it can be tempting to just go with the first one that comes along. But if you’re not careful, you could end up paying more than you need to or getting less than what you want from the service.

Ask for references

You’ll want to ensure that any CPA you’re considering is qualified and experienced enough to help you with your needs.

Make sure they’ve worked with companies like yours before and have had successful results with those businesses.

Check their credentials

Ask for their license or certification number to know exactly what kind of education and experience they have. They should also have copies of any related certificates/degrees.

Check their relevant experience

You don’t just want a CPA with experience but one with relevant experience working with small businesses and your industry.

This will ensure they understand your business and how to help you grow it. If they don’t have experience, ask them how they believe they can help you and what their biggest challenges will be.

How Much Does Hiring a CPA Cost For a Small Business

The cost of hiring a CPA depends on the type of business. A small business, such as a retail store or restaurant, will pay less than a large corporation. And the fee will vary depending on the number of services you require.

As for how much it costs to hire a CPA, accountants charge around $180 per hour. Some CPAs charge by the project rather than by the hour. If you choose this option, expect to pay between $1,500 and $3,000 for each project.

Takeaway

Now that you know more about what a CPA can do for your small business, it’s time to find one that fits your needs. And remember, we are always here to help ensure that your finances are in order and answer any questions you may have. Feel free to reach out and schedule a call with us today!

Sources:

1 – https://www.aicpa.org

2 – https://www.mass.gov

3 – https://www.lendio.com