By Ben Kinsey, CPA
|Image courtesy Max Pixel|
Every business owner is always looking to add value to their business. That’s why they spend so much money on everything from fancy offices to first class business cards and brochures. As they say, perception is reality. While most business owners employ a CPA, what many don’t realize is that all CPAs aren’t created equal. What I mean by that is CPAs are like doctors in that many of them tend to specialize. While they are all capable of helping a business maintain and reconcile its accounts, prepare financial statements and do basic tax prep work, some of them are more adept at helping a business find every tax loophole, while others are better at showing clients how to improve their processes to either save or make money. Depending on the type of business you operate or the stage of development that your business currently is at the moment, finding the right CPA could have a huge effect on your bottom line.
Getting Started on the Right Foot
Even startups need accounting help. When many small businesses begin, most of the emphasis is placed on the owners whose skills are the backbone of the business. While most startup owners are skilled at selling and servicing their accounts, what many of them lack are the skills necessary to help them price their services with an eye toward growing the business. Moreover, since startups entail wearing a lot of different hats, the last thing most startup owners have time for is keeping track of the numbers. This sometimes puts them in the unenviable position of selling their business into the ground. Even fledgling business who have the wherewithal to invest in accounting software to record transactions and make sure they are getting paid for their efforts on a timely manner, few of them know how to break these numbers out into meaningful reports that can show them whether their efforts are leading them to reward or ruin. CPAs who specialize in working with startups can not only help a fledgling business owner make sense of the numbers they generate, they can also help them improve profits, cut costs and foster growth.
Here We Grow Again
|Image courtesy pixabay|
While it’s true that two thirds of businesses fail in the first two years, what cripples a fair portion of the remaining third are growing pains. That’s right, some businesses are actually undermined by their own success. The realities of scaling a business up are sometimes more daunting than getting a business off the ground in the first place. Everything from staffing considerations to scaling up production and supplies can put a business on the rocks in a hurry if preparations aren’t made in advance. Sometimes these preparations include detailed forecasts that let the owners know in advance the steps they need to take to keep their business going and growing. Other times, it also includes proving to a bank that the business is credit worthy so a banker will approve a credit line or loan that allows a business to grow. Having the right CPA who knows how to handle a business’ growing pains could make or break a firm that’s poised for growth.
The Taxman Cometh
|Image courtesy wikimedia|
Another way in which the right CPA can help businesses grow is by minimizing their tax burden. While all CPAs know how to prepare tax statements, some are more adept than others in helping companies reduce their tax burden. That’s because keeping up with all the changes in the tax code is practically a full-time job in itself. Plus, some CPAs are more comfortable helping contractors or business professionals find tax shelters, while others are more adept at helping retailers or manufacturers reduce their tax burden. Finding out the kind of businesses a CPA prefers to work with can many times lead a business owner to look for another CPA.
Can You Outgrow Your Current CPA?
Even if your CPA is a perfect fit for your business today, if your company grows dramatically in the next few years, you could find yourself in a position where you can outgrow your CPA. That’s not a bad thing, provided you plan for the transition in advance and begin your hunt for a new CPA long before you drop your current one. While no CPA likes to lose an account, most are more than happy to accommodate a business owner who is obviously moving up into a class that the CPA is not set up to handle. The best of them will even help a client choose the right CPA, then make the transfer of accounting data easy for a business owner.
Depending on how far and how fast a business grows, it isn’t uncommon for the owners to switch CPAs several times. It’s all part of the learning curve through which businesses go as they strive to beat the odds and best the competition. When it comes to understanding the math of the game, who’s better than a CPA to help your business gain a competitive advantage?
Ben Kinsey, CPA of Small Business Group works with owners of closely held corporations in the Northeast Florida region. If you work in the North Florida area we offer a FREE initial Consultation at our office, please contact Small Business Group if you would like to know more about strategies for your business.