If you own or operate a business, chances are you either have or will soon be deciding whether or not your business needs a CPA. The answer to this question is an important one to consider as you bring your business into the future, and the answer is not always clear.
In this month’s post, we’ll outline the benefits of both options and when you should choose each option.
What is a CPA?
A CPA, or Certified Public Accountant, has met specific educational requirements, completed a required exam, and is an expert in the field of public accounting.
They hold not only the training required by law to become a Certified Public Accountant, but the experience to go along with it. As such, CPA’s provide…
- Preparation of audited, reviewed, or compiled financial statements.
- Preparation of federal, state, and local taxes, working with clients to help them lower their tax burden.
- Representation in front of the IRS in the case of an audit or other issue.
- Formation services such as deciding on legal structure and executing formation documents.
- Management services to improve a businesses day-to-day operations and provide strategic long-term planning, including budgeting and financial planning.
Certified Public Accountants do more than just perform tasks, however. They are a team member that adds value and helps provide direction for your business.
What is accounting software?
Accounting software helps bookkeepers keep track of business transactions and key financial information. Generally, these systems are best managed by someone at your business who is financially literate and holds at least a basic understanding of finance, accounting, and bookkeeping.
Accounting software can help you…
- Keep track of relatively basic transactions and cash flow
- Prepare simple tax returns and payments with the proper paperwork and information on hand
- Achieve a certain level of basic financial forecasting and modeling
There are dozens of reputable accounting software options to help all different types of businesses.
Why is accounting software valuable?
Accounting software is valuable as it allows you to track and record financial progress in a way that’s organized. Quickbooks and others like it allow those who run small, uncomplex businesses to keep track of their finances in a relatively low cost and efficient manner.
Why are CPAs valuable?
Accounting software is a great option for businesses with limited cash flow, employees, or financial accounting. However, when you enter complexity into the scenario, a CPA is a valuable resource and trusted advisor who can help a business grow and succeed. .
CPAs have almost a superhero-like ability to help businesses grow into the businesses they want to become.
How do they do it?
CPAs have real world experience that allows them to provide insight and strategic business advice. With a licensed CPA, you’ll develop a relationship. They’ll get to know your business and will help you make decisions that are right for you.
Accounting software, while useful, cannot help you understand a complicated financial problem or provide advice on a tricky strategic financial decision. That will make you try to figure out a solution on your own, ending with potentially catastrophic results.
They have experience
If you’re having an issue with your business, chances are that an experienced CPA has worked through the same issue at some point in their careers. This experience delivers advice that can help you through whatever conundrum you’re experiencing.
They have industry-specific advice
Most accounting software is industry agnostic and not designed with your specific industry in mind. The recommendations they’re giving you and pieces of data they collect are not necessarily relevant to your industry.
When you hire a trusted CPA, they’ll be able to give you advice that’s relevant to you and your business, not just businesses in general.
They can help you with your business beyond keeping track of numbers
At Opsahl Dawson, we take pride in the strategic advice we’re able to give our clients. A part of this is being able to comprehend financial statements and data, provide relevant and timely advice based on this information. While accounting software can do this on some level, it cannot comprehend this information and put it into up-to-the-minute context.
CPAs are able to present you with this information in context and on a deeper level. They simply have the training and knowhow to give this advice. Again, they’re human, so are not just looking at data. They’re looking at the market and what your business’s performance means within it.
Less mistakes will be made
While using software may help you avoid mistakes, CPAs have an answer for that, too. In fact, they use highly advanced software that is intended to provide the benefits of accounting software (namely catching mistakes), while also providing the expertise and advanced modeling that CPAs provide.
They require less of your time
Maybe most important of all, CPAs let you not worry as much about the finances of your business, helping you focus on the pieces of your business that mean most to you. You’ll have a professional working alongside you, who can provide you with the expertise and safeguards that come with working with a CPA.
Your finances will be handled in one place. With a CPA from a trusted Vancouver firm, you’ll essentially have your own CFO on staff.
When can I get by with just accounting software?
For small, non-complex businesses with few employees, software can be a great option. It’s also not a bad option if you have a background in finance and are good with numbers.
Still, even in this scenario you will likely need the help of a CPA or financial professional at some point. We recommend cultivating a relationship and enlisting the help of a CPA for complex issues, filing taxes, and helping you troubleshoot issues.
When do I need a CPA?
Most businesses outside of the smallest ones will likely need a CPA. Even if you’re running a small business now but are intending to grow it, a CPA is a great investment in your business’s (and your own) future.
CPAs will help you grow, stay legal, and reduce your workload. This is particularly great for entrepreneurs who are still getting used to managing two different financial lives: their business and their personal finances.
Most of all, when you hire a trusted CPA, you’ll have a team member that will help you navigate the financial waters of running a business.
Develop a relationship, not just a service
At Opsahl Dawson, we develop long-term partners and work hard to ensure the continued success of our clients. We’re invested in making sure you develop the type of financial success you’re in business to achieve. Let us handle the financial aspects of your business so you can get back to doing what you love to do — running your business.
Contact us today to see how our CPAs can add value to your business.