In the increasingly elaborate landscape of business finance and taxes, enlisting the expert guidance of a CPA firm that specializes in helping small businesses navigate continually evolving regulations, codes, and compliance requirements are essential to sustaining viability and growing profitability. The relationship between a business and its CPA firm is a vital one that can position an organization for optimal operation and growth.
We’ve put together a three-part series to help small business owners maximize the benefit of that relationship. Over the next two installments, we’ll explore how to identify when it’s time to seek a new CPA firm to support your small business, as well as what strategies you can employ to select a firm that is ideally suited to become not only a financial and tax service provider but a trusted advisor promoting your organization’s long-term growth. And we’ll begin our series here, with an examination of the key benefits small businesses gain when they partner with a specialized CPA firm.
Leverage up-to-date expertise for tax filing.
It goes without saying that a CPA is a valuable asset in maximizing deductions and credits and minimizing taxes owed, but the key here is that working with a CPA firm that specializes in small business will ensure this level of expertise year after year. And that matters now more than ever, as the implications of the Tax Cuts and Jobs Act (TCJA) passed in December 2017 are still unfolding and being interpreted. In addition to unpacking the ramifications of the largest overhaul in U.S. tax codes and regulations in almost half a century, small businesses are also dealing with the tax implications of pandemic-related financial shifts and aid measures like the Paycheck Protection Program (PPP), the Economic Injury Disaster Loan (EIDL), and other federal, state, and local measures.
CPA firms maintain a rigorous standard of keeping current with the most up-to-date changes, regulations, interim rules, codes, compliance requirements, and legislation so that your business can benefit from this expertise without spending the time and effort to sustain that degree of specialized knowledge in-house.
Evaluate and mitigate risk.
Absent the expertise of a small business CPA firm, small business owners face legal and financial risk they may not be aware of or have the resources to avert. From audits and fines assessed due to an inadvertent mistake in filing or a missed reporting deadline to compliance issues that can result in punitive measures ranging from fees to loss of licenses, these risks can carry serious consequences—the key, however, is that they are largely avoidable when you partner with a small business CPA firm that understands your business and the financial laws and landscape.
Small business CPA firms provide ongoing support not only in the accurate filing of taxes, but in maintaining the proper schedule of reporting, ensuring compliance, and anticipating and advising you regarding areas of vulnerability. In the event that, even with diligent adherence to requirements and a proactive approach, an issue such as an audit arises, your CPA will represent you to ensure the quickest and most successful resolution.
Maintain financial health.
Just like physical health, the financial health of a small business is best served with regular preventive care. A small business CPA firm isn’t just there to help you when tax season rolls around but is a continual source of support and guidance throughout the year. Quarterly financial check-ups are useful in taking the financial pulse of your business, analyzing and assessing the status of key indicators like inventory, cash flow, profit margins, and adherence to budget.
A healthy business is a nimble one, better able to anticipate foreseeable challenges and respond to unforeseeable ones. Having your financial house in order and current data and insights at your fingertips also enable you to act quickly when opportunities arise for market expansion, mergers and acquisitions, and strategic alliances.
Guide long-term growth.
Not only will quarterly financial check-ups help you spot potential areas of concern before they grow to larger problems and act wisely and swiftly when opportunities arise, but they are useful in establishing trends that can be mined for valuable insight. A good small business CPA firm will help you leverage this insight to plan for long-term growth, creating a path forward whose nuances are continually enhanced by current data, but whose overall trajectory is grounded in aligning future goals with a comprehensive and deep-tissue analysis of the business over time.
A small business CPA firm can also provide critical assistance in the steps along the way to those long-term goals, whether they be assessing the best time and source to seek funding, or weighing the risks and benefits of an acquisition.
While these are a few of the most significant advantages to partnering with a small business CPA firm, there are many more. Reach out to your CPA today to discover how you can benefit most from this vital business relationship.
Matt Brady, CPA