If you’re running your own business but don’t have a Certified Public Accountant (CPA), it’s time to get real. Having a strong CPA by your side is key to ensure your business is in good shape when it comes to its tax situation. But a good CPA isn’t just about getting those tax forms filed; a good CPA provides valuable strategic guidance and resources. He/she will ensure the decisions you make in your business are the best ones possible.
So if that all sounds wonderful but you still don’t have a CPA, perhaps it’s because you’ve fallen prey to one of the following most common excuses business owners use to not hire a CPA. Trust me, I’ve been there. As a former CPA myself, I thought I could DIY things for longer than I should have. So I get it. With all of the other things we have to find and pay for in our business, the right CPA can often be neglected.
But humor me for a few minutes. If you’ve used any of these excuses to avoid bringing on a CPA in your business, you may want to listen up. A CPA can provide huge value at a relatively small cost. Even if you’re a small business, a new business, or you don’t have huge revenues yet.
Reason #1: You think you can’t afford a CPA.
This is the #1 reason I hear for why small business owners don’t hire a CPA. I get it. With so many expenses in your business, spending money on a CPA doesn’t feel like the most exciting or sexiest choice. But think about a CPA like insurance – by investing in the right one now, you’re potentially saving yourself money and hassle down the road.
If you miss a tax form, or forget to make a payment, or the IRS decides to audit you, you’ll be glad to have a qualified CPA by your side who can ensure you are well-represented and that the process doesn’t drain you emotionally, physically and financially.
The cost to work with a CPA is fairly reasonable for most small businesses. While prices vary depending on the CPA’s experience, team and geographic location, and on your business’ size and complexity, it’s usually possible to find a qualified CPA in a price range that you can afford. Start by asking for recommendations from other business owners. And remember, you don’t necessarily have to work with a CPA in your area; as long as they are well-versed in the tax laws of your state and have a good system set up to handle their remote clients, you may be able to save some money by expanding your geographic reach.
Bottom line, you can’t afford NOT to work with a CPA. I don’t want to scare you. But making a mistake with the IRS can cost you a lot of time, money, and stress. Much like you would purchase business insurance or the right legal contracts, having the right CPA to not only prepare your tax filings but offer you guidance is the key to avoiding the hassle that comes with dealing with the IRS.
Reason #2: You’re afraid to show someone else your numbers.
If you cringe every time you think about the “money” in your business, you might have made this excuse. Perhaps you’re embarrassed by where your revenues are at or think you don’t make enough to justify having a CPA.
The thing about a good CPA is, they want to start working with you from the ground level. As a former CPA, I can tell you how much hassle it was to clean up messes that my clients had created. All because they didn’t have a CPA from the beginning. And not only was it stressful and time-consuming, but it cost them a lot of money too. So the earlier you can bring on the right CPA, the better.
And don’t be embarrassed by the state of your business or afraid of what the numbers will say about you. Building a business is hard and we all start out at the bottom. A good CPA will be an advisor and a confidante as you’re building your business. You should see them as the trusted resource they can be and open up those books baby!
Reason #3: You don’t know how to find the right person.
I’ll admit, finding the right CPA is not as easy as googling “CPA” and clicking on the first link. You do need to put a little time into finding the right person for your business. But it doesn’t need to take THAT much time. I recommend starting by asking other business owners in your industry for recommendations. Choosing a CPA who has experience in your industry and with your business type is key.
Want more guidance on how to find the right CPA? Check out this blog post here.
Reason #4: Since you’re not making a lot of money, you think you can DIY your tax filings.
I’ve heard this too often – “I’m not making much money in my business so I can do the tax filings myself”. Or its sister statement – “My business isn’t that complex so I can do it all myself.”
While the advent of Pinterest has convinced us we can DIY anything, googling #PinterestFails is proof that is not the case. Tax returns is one of those things you should probably not DIY.
Now, there are some situations in which a business has so little complexity and a business owner has enough financial acumen that the DIY route may make sense for the first few years. But as previously discussed, the benefit of a CPA goes well beyond just filing the tax returns. A good CPA serves as a resource and an advisor for strategic planning in your business. Even if your business is simple, the tax laws are not. One change could affect your business greatly. It’s important to have someone on your side who can help you navigate the system.
And let me be clear here – whether or not you should bring in a CPA has nothing to do with how much revenue your business has. While your potential penalties on any tax errors will likely be less if you have lower revenues, there are still mistakes you can make as a business regardless of how much you make. And there are still tax-saving opportunities to be aware of when your business is new or not making a lot of money. Depending on the type of legal and/or tax entity your business is, there are actually things you NEED to do in the early years to make sure you are better off when you’re raking in the dough.
So it’s not as simple as being able to fill out the form. If you’re not convinced, at least talk to a CPA about the value they can provide you and your business at this early stage.
Reason #5: You’re too busy.
If you’re putting off finding a CPA because you think you don’t have the time to find and work with one, then I’m assuming you’re planning on skipping all of your tax filing obligations? Because getting the right CPA on your side will SAVE you time in your business.
That time you save can be invested back into the things that matter. It will drive the needle forward for things such as bringing on new clients, pursuing additional marketing opportunities, and creating new revenue streams. Wouldn’t you like a little more time for the good stuff in your business?
Don’t believe me? I’d estimate that having a CPA has saved me, on average, 5 hours in my business every month. I no longer have to deal with reading up on tax law changes, calculating estimated tax payments, filing sales and payroll taxes and filling out federal and state tax forms. And that doesn’t even factor in the value my CPA provides through the strategic planning and guidance she offers.
Spending money on a CPA isn’t’ the sexy or exciting choice, but it’s an important one. If you find yourself thinking you can’t have a CPA for your business because of the cost or the time, or you’re convinced you can DIY your taxes, think again. The value a good CPA brings to your business is nearly priceless and is critical to making the right financial decisions.