CPAs Beyond Taxes: What’s Their Role as a Business Advisor?

Most people associate Certified Public Accountants (CPAs) with accounting and taxes, and this is to be expected since they play a key role during the tax season.

However, the duties of CPAs extend beyond simply helping you file your taxes. There are so many ways that working with a CPA can benefit businesses. In this article, we’ll explore some of the ways businesses stand to gain from working with CPAs.

Before we delve into why your business needs a CPA’s insight, it is important to explain who is a CPA. A CPA is not just an accountant, but one that is licensed by the state to operate. CPAs have to pass an examination before they can get a license to operate.

There are many services a CPA can provide that an accountant cannot. For example, only CPAs can audit business and provide a report on the finances of the organization. Generally, CPAs have more experience and knowledge than accountants.

CPAs may have varying job titles in different organizations. However, their underlying duty is to help businesses plan and meet their financial targets. An experienced CPA will not only help you to create a realistic plan to achieve your business goals but will help you shape this target accordingly.

For example, if you set an annual target revenue that is not realistic, your CPA will advise you on a more realistic target and create a plan for you to meet that goal.

Increasing Profitability

One of the key benefits of hiring a CPA as a business advisor is that it can help to boost the profitability of your business. By auditing your organization, a CPA gains a bird’s eye view of your business. What’s more, most CPAs have deep business knowledge gained from working with different clients.

As a result, they can assist in identifying the aspects of your business that are least profitable, and provide insightful recommendations on the way to turn things around.

Expansion and Downsizing

Companies grow and shrink over their lifetime for several reasons. If you are considering expanding or downsizing your company, a CPA can be very helpful. With the expansion, a CPA can help to shape your vision and assist through the process.

For example, the CPA may identify legal requirements that you may have overlooked and even help to file documents, and complete other processes that you probably didn’t know was necessary.

If you are downsizing your company, a CPA can help to identify which aspects of your business are least profitable and draw up a plan to downsize without affecting your overall profitability.

Manage Your Finances

Perhaps, the most obvious way a CPA can help your business, besides filing your taxes, is managing your finances. CPAs can help you to keep track of how much is coming into your organization, and how much you are losing.

They can help to detect fraud and other forms of financial malpractice in your organization. CPAs can also provide critical advice for organizations on the kind of loan to take and the amount to request.

Also, your CPA can help to prepare a solid repayment plan, which will ensure that you do not default on the loan. A CPA can essentially be the chief financial officer in your organization and can handle things like preparing payroll and reporting on the status of your company’s finances.

Risk Assessment

CPAs can conduct a risk assessment of your business. This will entail identifying potential risks and creating measures to prevent these threats from affecting your business. For example, a CPA can consult with experts to identify scenarios where your company is liable to be sued by clients or contractors.

With this information, the CPA can create a plan of action to ensure that these threats do not materialize. A CPA can essentially act as a risk manager with a particular focus on the financial health of your business.

Keeping Records

It may seem like a trivial point, but the advantages of proper bookkeeping are far-reaching in organizations. CPAs are experts at keeping records of everything. Therefore, working with a CPA can create a healthy bookkeeping culture in your organization.

With proper documentation, you can tell whether you are close to your goals and monitor the general progress of your business. It also ensures that everyone in your organization is on the same page.

Recruitment

A CPA can assist in the recruitment process in your organization. Most CPAs take courses in human resources and related subjects. Also, with the experience gained from working with different organizations, CPAs are usually a good judge of suitability as far as prospective employees are concerned.

This is why it is a good idea to make a CPA part of your recruitment team. After all, the caliber of the employees you hire can have a far-reaching effect on your business.

These are just some of the ways CPAs can benefit businesses apart from handling taxes. However, there must be good communication lines between the CPA and your business for this to be possible. There is so much more that organizations stand to gain from working with CPAs, including getting advice on virtually every business-related subject, including mergers and change of management.

CPAs can provide priceless business intelligence that can go a long way to benefit your organization. With that said, you must take the time to find the right CPA for your business. Considering the experience and history of a prospective CPA is a good place to start.