6 Ways a CPA Can Help a Small Business

Posted: February 11, 2021 by PK in Bookkeeping

how can an accountant help with small business

There are two corresponding sides that must be equal, with one side listing debits and another side listing credits. Cash basis accountingis an accounting method in which businesses recognize How an accountant can help your business a sale when a payment is received. But we have to do it, so it’s good to know what the small business tax rates are for 2020—if for no other reason than to keep the IRS off your back.

  • Accountants help businesses from preventing financial mistakes that could cost a business money.
  • If you are unsure, weigh the initial costs against what a firm can save your company over time.
  • The analysis will help managers make informed decisions with the most up-to-date data.
  • Once you know what you want from your accountant, you can look for candidates.
  • Here are just a few of the things an accountant can do for your small business.

In both cases, you’re likely to get a list of CPAs in your local area. Results are typically sorted by zip code, so if you live in a small town you may need to adjust your search radius to see more possible CPAs. If your current accountant is going through the motions, you’ll be amazed at the difference a top accountant can make. They can bring a ton of extra capability and insight into your business. The easy answer used to be that they wore suits and sat behind big desks.

What are accounting best practices for small businesses?

This is just a balance sheet to show what kind of financial shape the owners are in. You have to sign a personal guarantee, which says that if the business fails, you will guarantee the loan out of your own pocket. E you’re caught up, it’s time to show the banks your financial data. Your accountant can help you gather these required pieces of information. Many small businesses take on loans to purchase a large piece of equipment, obtain another business, and even just to get cash flow money so they can expand. If you want to grow your business, it can be worth talking through your ideas with an expert.

Is an Accountant Worth It for a Small Business?

It depends on your situation, but accountants bring a lot more to the table than just filing taxes and handling paperwork. An accountant can analyze your business’s financial data which may show you how to make your business more profitable.

So, yeah, they should know their way around a computer—and be willing to learn new technology. And we’re not saying accountants need to be passionate about math—but they should be good at it. Accountants work with important financial data every day, so a strong foundation in math and analytics is a must. If you just need a CPA for a one-time audit or to file your taxes once, this may not seem like a big deal. But if something comes up, you want to make sure this is their full-time job, not a side hustle they work only during tax season. This is one of the most important things an accountant can do for you.

How an Accountant Uses Monthly Financial Statements to Offer Advice

A lot of business owners are hesitant to hire an accountant because they’re afraid it will impact their bottom line. The fact of the matter is that a small business accountant can dramatically improve your bottom line. In fact, in a study performed by Intuit, 89% of small business owners said they have become more successful since hiring an accountant. The first step in choosing an accountant is to determine what you want yours to do for you. Some accountants are willing to do bookkeeping, while others focus on broader business tasks. If you are looking for a bookkeeper to handle the mundane daily or weekly bookkeeping duties as well as an accountant, you’ll want to look for an accounting firm that provides both services.

  • Also ask how readily available your accountant is going to be, how much time they will dedicate to you, and whether the work will be done at your place of business or the accountant’s.
  • This less expensive option still delivers high-level accounting expertise.
  • For a full rundown of filing taxes as a freelancer, check out the FreshBooks blog.
  • Can help you generate financial reports, manage taxes, and take care of other small business accounting tasks.
  • Intuit accepts no responsibility for the accuracy, legality, or content on these sites.

But advice from a professional can only be helpful if you’re willing to take it. CPAs have to pass an exam before they can get their license through the state. Once they’re officially a CPA, they’re allowed to prepare and sign tax returns for individuals and businesses and can represent taxpayers before the IRS for audits. Xero does not provide accounting, tax, business or legal advice. You should consult your own professional advisors for advice directly relating to your business or before taking action in relation to any of the provided content. Nothing beats a recommendation from someone you respect and trust so ask friends, family and business partners what they think of their accountants.

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