Many small business owners are often stuck between choosing to hire a certified public accountant (CPA), or doing their accounting by themselves. This is understandable, especially if you are starting a new business and have the goal of saving cost. It is possible to handle your daily accounting needs on your own if you have some accounting background or get a book-keeper.
However, an experienced CPA could be all you need to take leading business decisions. Also, a CPA can ensure you don’t make costly errors in your business. But before you go any further, you need to note that an accountant is not the same as a CPA.
A CPA has a better understanding of tax laws and standard practices in accounting. They have also been offered a state license after passing the Uniform CPA Exam, which is a tough one to pass. Also, they are required to take professional courses to hold on to their licenses, and may even have their licenses withdrawn if they dabble in fraud, or ethics violation. Besides, the CPA has an infinite representation of your rights before the ATO (Australian Taxation Office).
All of these make it vital for you to get the services of a CPA in your small business. Below are a few additional instances you should get the services of a CPA.
When you should get the services of a CPA
During tax seasons
As mentioned above, a CPA can represent you when the ATO comes calling. This alone is a significant benefit, but these professionals can help you do more than this. They can help you in the preparation of tax documents, and file your tax returns.
Furthermore, they can offer you tax planning advice so you can get minimum tax liability during the subsequent tax season. Business taxes are more complex than personal taxes, and having a good CPA by your side can ensure you get it right the first time.
There are also other ways a CPA can offer you help during tax seasons. These include:
- They can make sure you comply with tax changes: Tax codes can change at any moment, and as a person trying to run a business, it may be challenging to keep up with all of these changes. A good CPA can help you stay abreast with the changes in the tax codes. They can also let you know the impacts these changes may have on your business if any.
- They let you know the deductions you are eligible for: if you make questionable deductions, it may trigger an audit from the ATO. This can hamper your business activities, and place your mind on edge. An experienced CPA can let you know if a deduction is worth it and which you should avoid.
Before you begin a new business
It may seem like a costly decision to get the services of a CPA when you are about to start your business. This is to be expected considering how costly it is to get their services. However, these experts are worth every penny spent.
An experienced CPA can help you take all the right steps in setting up your business. Besides, they can make sure you don’t make mistakes that will require lots of cash to correct later on. These specialists will always be available to provide you with professional advice when you need it.
A CPA can also suggest the ideal structure for your business. Your taxes, reporting, and liability requirements are influenced by the legal structure utilised in developing your business. These include LLC, partnership, co-op, sole proprietorship, and so on.
These professionals can help you pick the one that best aligns with your business. If you go with the wrong legal structure, you will need to go through a lot of expensive loopholes to correct later on. Having a CPA by your side will ensure you don’t have to go through all of these.
When making structural changes to your business
If you are making moves to merge with another business, purchase a business, close or sell your business, and so on, a CPA can help you out. These professionals can let you know about the repercussions for your business and yourself when you make any significant structural change.
If you want to sell your business, a CPA can let you know what the fair market value is. They can also help you get ready for sale by preparing your statements and financial reports. The same applies when you are buying a business; a CPA can help you out with the due diligence to make sure that you are not making a mistake.