After I entered the job force at 18, I had money problems for quite a number of years. I earned a decent income, but I lived paycheck to paycheck and just felt like I would never get ahead financially. One day, determined to get ahead, I decided to record every purchase I made for a month to find out just where my money was going. I learned a hard lesson that day that small purchases here and there throughout the month really add up. I committed to a much smaller budget and began stashing savings away. Then, I researched the world of investing and made a few strategic ones with some of my savings. I am now doing much better financially, and I want to help others who need it, so I am starting a blog. Come back often for money management tips and tricks explained simply!
A common misconception is that certified public accountants are only meant for big corporations. Yet the services offered are just as important for your small business. Many certified public accountant firms offer consultancy services. So you may not need to hire a CPA employee part-time or full-time. Instead, consult one to get professional guidance in the situations discussed below.
Before you set up your business
When you launch your small business, you may find it hard to spend money on a certified public accountant. However, certified public accountants guide you to avoid costly mistakes at the onset of your business. Two essential decisions for which you need the guidance of a certified public accountant include:
Accounts Practices
You can either do cash or accrual accounts based on your business operations. While many new businesses use cash accounts, the IRS may require you to use accrual accounts in certain situations. You must be on the right side of the law with the IRS and other statutory requirements. As such, you need certified public accountants to advise you on the account type to use.
Business Structure
Certified public accountants recommend the best legal structures for your business. Whichever structure you choose will affect your report requirements, taxes, and liability. You might not easily make amendments later if you get the structure wrong. If you do, you'll have to reapply for your license, notify your bank and insurers, and request a new employer identification number.
All these processes consume lots of time and money, which you can save if you avoid mistakes from the start.
During Structural or Operational Changes
When you face mergers, acquisitions, or dissolutions, you face tax implications for yourself and your business. A certified public accountant comes in handy to verify your assets, analyze your financial records, and do some due diligence. A serious buyer expects excellent financial records if you want to sell your business. Failure to produce the records may make you miss deals or get low offers.
During Tax Times
Certified public accountants file tax returns, prepare tax audits, and strategize ways to reduce your tax liability. Even if you have filed personal taxes before, your business taxes are more complex. This complexity increases when you hire employees or deliver products to different states. Also, a CPA tax services provider represents you if the IRS asks questions about your returns or audits.
Conclusion
While you may be tempted to do your own taxes, CPA tax preparation services can save you time and money. You spend less to get more and avoid costly mistakes that could put you in a financial crisis. So, whether you plan to start or you already have a small business but haven't done professional bookkeeping, it's time to contact a certified public accountant.
Share24 May 2022
