5 Signs Your Small Business is Ready for a CPA.

Small business owners are used to assuming multiple roles within their companies including working on accounts and sales, human resource tasks, marketing and accounting. This is a common approach because of the lack of resources to hire dedicated professionals for each function. However, when business growth occurs the demands change making it more difficult for the owner to wear so many hats and The result is missed opportunities due to the lack of time to properly address important topics. Naturally an owner’s attention is to focus on account management and new business development which means other areas can become neglected. This leaves key functions such as accounting to go largely ignored until a financial, tax or other reporting need arises. These are important signs that a company is ready for a CPA. To help clients, prospects and others identify these signs, MSPC has provided a summary of the five key signs below.

Five Key Signs You’re Ready for a CPA

  • Lack of Time – Does managing your books and other accounting responsibilities consume a significant portion of time? For many the answer is yes. Unfortunately, the time spent in addressing accounting, tax and other financial issues means less time available for accomplishing tasks that can help grow the business. Initially the tradeoff between cost and time made sense but as a company grows the value proposition is no longer viable. The time invested in addressing accounting needs comes at the expense of other essential activities. By transitioning the work to a CPA, owners can get back important time to use in other areas of the business.
  • Sustained Company Growth – The opportunity to work with more customers is exciting for a business owner. It means the company’s strategy and tactics have been successful and can open the door to additional business opportunities. However, it also means that more time will be needed to manage the growth. Hiring and training new employees, managing customer relationships and vendors accounts will consume more time. The result is an overburdened owner who lacks the ability to manage an increasing workload.
  • Business Profits Not Increasing – When a company is growing there should be an increase in revenue and profit. If a company has revenue growth but profit is stagnant it is a sign of problems with overhead and cost management. As the demand for products and services increase naturally a company will need to spend more on labor, materials and other essentials in the delivery of these. However, when profit is impacted it’s essential to review cost drivers and identify where issues exist. A CPA can conduct such a review and provide solutions to bring balance to the situation.
  • Expanding Operations – When a business owner considers expanding the business it’s essential to have a clear understanding of both the risks and benefits. Not only does this include issues such as a labor, production and market position, it also includes the financial side. A CPA can identify the best timing to make new equipment or other purchases to maximize tax benefits through depreciation. They can also provide insight on other activities such as when and where to hire. Additionally, there are several new job tax incentives available to companies meeting certain criteria that a CPA can help navigate. The point is that involving a CPA early in the process can help identify key tax savings.
  • Facing an IRS Audit – This is an experience that no taxpayer, business or individual, ever wants to be faced with. Typically, an audit is triggered by issues in a company’s accounting, tax or other filings. During an audit, the IRS will review a company’s books, financial records and other tax documents to determine if mistakes were made. Most business owners don’t have the time or experience to manage an IRS audit. A CPA can review accounting and tax records to ensure they meet best practices and demonstrate compliance which in turn can help stave off an audit to begin with.

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Change is an essential part of owning and running a business. If a company grows without the proper support, the signs you’re in need of a CPA will regularly present themselves. If your company is experiencing one or more of these issues or would like assistance outsourced accounting, MSPC can help. For additional information call us at 908-272-7000, or click here to contact us. We look forward to speaking with you soon!