You undoubtedly thrive in a DIY setting as a business owner, but the more hats you wear, the less you'll effectively complete. One of the most crucial aspects of maintaining your company's profitability is accounting. The software can only go you so far when you get started and as your business expands. A CPA can assist your business in development. In all phases of growth, your company requires a CPA for the reasons listed below.
1. Your business is in the startup phase
There are many things to think about when you’re just starting out:
- Business structure
- Business plan
- Bank accounts
- Government regulations
- Location
- Financing
The way you set up your operations might have a significant impact on your future performance; despite the fact that you might feel it's too early to hire a CPA. A CPA or a CPA firm like Answers.cpa, one of the top CPA firms in Colorado Springs can aid you in choosing the best business structure, checking the financial feasibility of your business plan, and guiding you in making wise financial decisions throughout the startup process to avoid having to spend more money later to fix mistakes.
2. Your company employs personnel
You might not think you have enough work as a CPA during the first few years of business. However, the reality is that even if you don't have a sizable workforce, a CPA will have the specific knowledge to make your money work for you. A CPA may:
• Ensure that workers and independent contractors are classified accurately; • Monitor payroll and payment procedures; • Establish reasonable deadlines for W2 and 1099 form submissions.
3. Audits are necessary for your business structure
If you don't speak with a CPA, you might not be aware that your small business is exempt from the requirement to perform audits until it's too late. The Sarbanes-Oxley Act (SOX) mandates compliance for publicly traded corporations, and some SOX requirements may also apply to privately held enterprises preparing for an IPO. Additionally, all companies should adhere to regional generally accepted accounting principles (GAAP). The right regulations are followed by your records if you hire a CPA.
4. A financial statement is required by your lender
According to the Small Business Administration, nearly $6 billion was borrowed by small businesses in 2017. Your company will probably want more money at some point, whether it's for growth, acquisition of new machinery, real estate, or even the creation of an emergency fund. Having a CPA create a financial statement before you approach a lender will improve your chances of being accepted.
5. Your spending is insufficient
The Bureau of Labor Statistics estimates that within five years of opening, nearly half of all enterprises will fail. Even though there are numerous reasons that contribute to failure, not hitting your budget targets can make it less likely that your company will survive. You can ensure that your budget is on track for success by having a CPA on hand to examine it, aid with modifications, and spot mistakes.
Before selecting an accountant, consider the following questions:
- Do your financial projections and company planning line up?
- Do you have a copy of the tax code?
- Do you have enough free time to handle all of the accounting responsibilities on your own?
- Are you certain that your staff is properly classified?
- Are you aware of the auditing criteria that auditors use?
- Are you aware of the requirements for a financial statement?
- Does your budget serve your needs?
You can gain from working with a CPA if you said "no" to any of these questions.
Where to find CPAs
You might quickly look for an accountant on Google, like “Colorado Springs CPA firms”, but how would you know if they are qualified? There are several databases of accountants, but you should look for a certified public accountant to make sure the accountant you select has the skills and experience you require (CPA). These professionals will have passed a rigorous CPA exam and are licensed by the state in which they work. Another choice for Tax Preparation and tax resolution is through enrolled agents. The federal government has given enrollment agents the right to represent taxpayers before the IRS. Taxes are their area of expertise, whereas CPAs frequently focus on providing tax, accounting, and financial services to organisations in the state where they are certified.
A resource is available to Coloradans to assist them in selecting a certified public accounting company. Colorado is now a part of a national database of CPAs and CPA firms where customers can use CPAverify.org to look for any disciplinary proceedings and verify a license for free.
Although consumers can use the Colorado Department of Regulatory Agencies to confirm a license and look up disciplinary information, the national database CPAverify.org offers consumers a centralised way to quickly and accurately look up the official license status of a CPA or a Colorado Springs CPA firm and across multiple states without having to visit each state board website separately.