Eight reasons you need to hire a CPA for your small business
Regardless of business size, all businesses require financial and tax advisors. However, your company needs more than just an accountant or enrolled agent; it needs a CPA.
Increasing complexity in the business and tax worlds has made it essential to have a Certified Public Accountant (CPA). Most business owners lack the expertise needed to ensure full compliance in all areas of tax. F
ortunately, CPAs possess this expertise. Businesses turn to them for support on a wide range of financial and tax issues, such as accounting services, developing budgets, tax planning, financial reporting, auditing, and designing accounting systems.
However, most business owners have in mind is why they need to hire a CPA specifically. Why can’t they work with an accountant or a public agent? The answer to this is simple, CPAs have more to offer than the other two. Firstly, not all accountants are CPAs, but all CPAs are accountants. CPAs are also tax experts who can prepare your business’s taxes, provide financial advice, and possibly save you money.
On this note, let’s take a look at some of the valid reasons why you need to hire a CPA for your business.
1) Take full advantage of tax discounts and exemptions
Do you believe you are doing everything possible to minimize your business’s taxes? If not, you may want to take a closer look at where you are now. You can save money by hiring a CPA because they can help you optimize your tax deductions and deductions.
In order to lower your current year’s tax liability, maximize savings from deductibles, and take advantage of credit opportunities, a CPA can assess your situation and recommend the best approach so that you can focus on growing your business. CPAs know how to make use of Wiley CPA Review to formulate the best strategy according to your business.
2) Client representation in IRS audits
CPAs are also qualified to represent you before the IRS during an audit, which is yet another reason to hire one for your business taxes. An audit can be a time-consuming and complex task that takes you away from your business.
Many requests are made for records, documents, and other evidence to support claims made on the tax return during an audit. The IRS can be a hassle to deal with, but CPA firms typically have experience representing businesses in IRS matters.
3) Opportunity for savings
Consulting a CPA before starting a new business can be especially beneficial. You may have to spend a lot of money to fix an incorrectly set up company. You can ask a CPA for advice about the legal structure of your business, such as whether you will be a corporation, LLC, or sole proprietor.
If you need to change the design of your business, you will need to pay more in the future to change licenses, insurance, and banking.
4) Access to financial information and resources
Having a CPA who is skilled and knowledgeable in applying technology designed specifically for accounting is advantageous to a company in many ways. For example, it helps in enabling the making of quick statements and reports, new filing processes, and quick and easy access to financial information.
5) Reduced filing issues
CPAs are expected to keep up with changing tax laws through a continuing education requirement. Due to the fact that tax reform continues to create comprehensive changes, you may want to hire a tax expert to help with your business taxes. Moreover, having a well-versed and technologically updated financial expert on board will significantly help you reduce tax filing errors.
6) Support for big changes
A CPA is probably the best person to consult when you decide to make a big change – such as moving, merging, buying, or closing a business. This is because you and your business may be subjected to tax implications by making such a big change.
Similarly, accountants can analyze financial records and verify assets when acquiring a new business. Again, bringing financial records up to date and getting an idea of the fair market value of your business will help you if you plan to sell it later on.
7) Availability of expertise all year
When you work with a CPA or CPA firm, you will have access to their expertise throughout the entire year, not just during tax season. In addition to providing expertise and knowledge based on financial data, CPAs also understand tax planning. Making better strategic decisions for your business will be easier if you have access to a financial expert.
In light of this, we recommend having a CPA on board, meeting with them every quarter, and incorporating a tax plan into your overall financial plan. A tax plan can help you reduce your taxable income and increase your overall revenue. Additionally, tax planning requires a thorough understanding of tax laws, credits, and deductions.
8) It makes business easier and more efficient
Most business owners are tempted to look after their own financial matters in order to save money. However, it may cost you more to outsource or hire experts at the moment, but your balance sheet will reward you in the long run.
According to a recent survey, entrepreneurs spend an average of 70% of their time on menial back-office tasks, such as bookkeeping. Those who run successful businesses concentrate on their core strengths and employ others to take on responsibility for doing other tasks. When you hire others to do such tasks, you can spend these hours generating more revenue for your business instead of researching, planning, and filing your taxes.
Do you feel completely confident that your business taxes are done correctly, even if done in-house? Did you take advantage of all available incentives and deductions? Could you defend your tax return if the IRS audits you? Consider partnering with a CPA if you can’t answer any of these questions. In addition, it will be easier to manage your finances when you work with a CPA.
In conclusion, every business needs a tax and financial advisor. The work of a CPA goes far beyond just crunching numbers and filing taxes, as we discussed earlier. CPAs offer more than just tax savings; they can help businesses harness financial resources to grow and save time.