Financial management plays a crucial role in keeping your business running. Having a bookkeeper is a good start toward an excellent financial management system. But if you want to take it up a notch, hiring a Certified Public Accountant (CPA) is the way to go.
CPA is an accounting professional with special designations known to be trusted in the business world. That title is earned by passing a professional certification exam on top of their required education and work experience. The strict licensing and their qualification requirements are what separates them from other financial experts.
Since they provide financial advice to different sectors, such as businesses, government agencies, financial institutions, individuals and non-profit organizations, CPAs continue to take education courses and are always compliant with their professional code of ethics.
One of the many important decisions you will make is choosing the right CPA for your business. These are the benefits of CPA services for your business:
What are the benefits of CPA services?
1. Industry Expert
You want to have someone who knows how to scrutinize a business operation and is involved in financial and accounting decisions. Business owners often neglect the big-picture view of their business finances as they get caught up in the day to day operations.
When you have a good CPA, that’ll be taken care of. They’ll be able to help you in securing a loan or in making long-term decisions, such as purchasing a large asset and evaluate the risks that go with it.
Hiring a CPA that’s familiar with your industry can deliver good results or even surpass them, give you guidance in good and bad economic times, work with you through recessions and during economic downturns, and keeping your business relevant.
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2. Tax Planning
Business taxes can be a little tricky and complicated. Without a CPA, mistakes can be easily made that can significantly affect your business.
CPAs can help you understand what records need to be filed and be kept; they’re experts in tax planning. This means they have the ability to thoughtfully consider your business’ deductions and credits throughout the year in order to lower your tax. Tax planning can bring tremendous savings for you and your business, all while adhering to taxation laws.
3. Loan Applications
A CPA will take a look into your cash flow before they advise whether taking a loan is a good option. They’ll take into account any possible associated risks, fines, and how it’s going to affect your tax. If you get a go signal, they can help prepare your financial statements for you.
Here are different types of formal financial statements that are specially prepared in certain situations:
- Basic Financial Statements. These consists of documents provided by the business owner to the accountant. It’s the least formal, thus, verification of its accuracy is unnecessary. This is also a way for the business owner to see the overall financial health of his company.
- Compilation Reports. Information in these documents need the CPAs better judgment regarding its accuracy. CPAs are more involved in compiling these and are often used for loans with heavy collateral, loans requiring fewer documents, or potential lenders.
- These are usually required on loan applications and financing that are more complex. The CPA responsible for preparing this has to have a solid familiarity with your business and the wider industry. They’ll be asked to provide a formal report regarding the accuracy of the documents.
- This has to go through rigorous verification of the accuracy of their numbers. This will require a CPA to examine the business inventories, bank accounts, and assets. An audit is necessary when making big business decisions, such as selling or merging your company.
4. Financial Evaluation
CPA periodically evaluates the business finance, which often happens four times a year. They look into the business sales data, cash flow, inventory, profit margins, and payroll to determine if any budgetary adjustments are needed.
CPA services are beneficial. To maximize its benefits, carefully choose the one that’s suited for you and your business. Make it a habit to meet with your CPA throughout the year to discuss any upcoming purchases, future financing, company changes, or staffing.
Come prepared all the time and gather all the necessary information and documents you think you’ll need during the meeting. This allows your CPA to help you in meeting your short and long term business goals.