Small businesses have plenty of options for keeping the books. They can hire bookkeepers and accountants to handle things in-house. They can contract everything to a CPA. They can use a combination of in-house bookkeeping and CPA services at certain times of the year.
Is there a right or wrong way to do it? No. Bookkeepers, staff accountants, and CPAs all offer value to the small business in different ways. However, there are certain circumstances under which a CPA is the best option. Business News Daily contributor Lori Fairbanks discussed a number of them in a January 7 (2019) piece.
This post will not cover everything Fairbanks wrote in detail, but some of her points are worth looking at a bit more closely. If you own a small business that handles accounting in-house, note that there may be times when you might find the services of a CPA firm invaluable.
When Facing Complicated Tax Issues
One of the first things Fairbanks pointed out in her piece is that CPAs are specially trained accountants with extra knowledge and experience in taxes. Certification requires additional education and the passing of the Uniform CPA Exam. In addition, CPAs must embrace continuing education in order to keep their state licenses current.
All of this is important if you are facing complicated tax issues. Remember that CPAs are accountants with specialized tax knowledge. They can help your business navigate the kinds of issues that your in-house bookkeeper or accountant would struggle with. This time of year (January), having a tax specialist working on your behalf is a good thing.
When Facing Annual Tax Returns
Your business may not be facing any complicated tax issues. However, you still have annual tax returns to file this time of year. Dallas CPA firm Gurian PLLC says that a CPA can make filing annual tax returns easier by helping you understand and comply with changes to the tax law. A good CPA can help you take full advantage of deductions, make sure all your expenses are properly classified, and so forth.
When You’re Facing an Audit
Fairbanks mentioned special circumstances requiring the expertise of a CPA. Among them are IRS audits. That’s the last thing any business owner wants. Getting an audit letter from the IRS is enough to send a business owner into emotional turmoil.
Once again, a CPA is probably a better option here compared to an in-house bookkeeper or accountant. Audits are fairly routine for CPAs with years of experience under their belts. They can help you successfully navigate an audit by providing the information auditors are looking for with as few complications as possible.
When You’re Changing the Structure of Your Business
Finally, a CPA is the right person to turn to when you’re preparing to change the structure of your business. Fairbanks specifically mentioned acquisitions, mergers, sales, and closures. All four bring with them accounting and tax considerations that have to be dealt with.
In the event of an acquisition or merger, a CPA can help you better understand the tax implications of your plans. He or she can verify assets, analyze the financials of the business you intend to acquire, and so forth. If you’re selling, a CPA can help you present your business in the best possible financial light.
In-house bookkeepers and accountants provide very valuable services to their employers. However, there are times when working with a third-party CPA firm is the better way to go. CPAs are certified professionals with specialized knowledge and the backing of a credentialing organization and a state license.