18 Sep Partnering with a CPA is more than accounting
Certified Public Accountants, or CPAs, are state-licensed professionals who can help businesses and individuals meet their sometimes challenging accounting needs. While it’s common knowledge that CPAs are adept at traditional accounting tasks—such as bookkeeping— which makes them often helpful members of a team or partners to an organization, CPAs have a lot to offer that goes beyond accounting. Truly, partnering with a CPA is more than basic accounting.
So, what are some of the ways a CPA can contribute beyond just traditional accounting practices? Some notable examples include forecasting, identifying financial trends, budgeting, valuing businesses, and regulatory compliance. CPAs can assist organizations in not only ensuring that their financial data is properly processed but also in taking data-informed steps, optimizing processes to be more cost-effective, and helping organizations ensure that they remain compliant with regulations and tax requirements.
In the business world, data can be one of the most important factors in an organization’s long-term success. CPAs are adept at processing financial data in ways that enable them to identify important trends, help organizations forecast ahead, create viable budgets, and much more.
To better understand how partnering with a CPA can go so far beyond simply accounting, let’s explore some of the ways it can do so.
One important way CPAs can help an organization is through forecasting potential future costs, spending, and financial performance. In business, the importance of actionable data can hardly be overstated. Nothing happens in a vacuum in the business world, and when it comes to understanding an organization’s financial standing and future prospects or even future risks, knowledge is power. While nobody can, with 100% accuracy, predict the future, CPAs can help organizations forecast for what may be ahead. This might include looking at previous financials, analyzing market trends, and carefully poring over an organization’s current financial standing in order to determine what may lie ahead financially.
While forecasting might focus on future trends, CPAs can perform a number of different forms of analysis that might look at an organization’s current standing in different areas as well. Optimization can be an important part of the way organizations strategize for long-term success; reducing unnecessary costs, streamlining operations, and improving ROI are all important considerations for many businesses, including small businesses, but they can require extensive analysis of large quantities of data. That’s where CPAs can come in. For example, CPAs might help an organization audit its financial standing and analyze for metrics such as a debt-to-income ratio or take a deep-dive and seek out long-term trends that the organization can leverage an understanding of to optimize operations to be more cost-effective, more profitable, or both, in the future.
Compliance and Tax Planning
While CPAs can help organizations with regular accounting needs, they can also assist in the complex world of regulatory compliance and tax planning. One of the challenges that many businesses face each year is ensuring that they remain legally compliant in their finances and avoid running afoul of the law, whether through reporting errors or tax errors. This can be especially crucial for a small business operating on thin margins to begin with. CPAs are often well-versed in matters of regulatory compliance and tax planning and can significantly assist organizations in ensuring that they remain legally compliant in reporting and paying taxes.
Planning, Budgeting, Insights
Having an effective partnership with a CPA often goes far beyond bookkeeping. In many ways, partnering with a CPA is often like welcoming a financial and economic expert into your team to help you navigate the myriad challenges that large and small businesses face in these realms. CPAs can assist organizations in everything from budgeting and planning to helping you better understand the impacts of certain financial actions.
Drawing from an extensive understanding of business finances and analysis of your organization, a CPA may be able to help you develop a more effective operating budget, assisting you in manners such as identifying opportunities to reduce costs or increase revenue or identifying opportunities to streamline accounting tasks that could otherwise generate unnecessary costs. When it comes to budgeting, a CPA can be an invaluable partner who can help you develop a sustainable plan.
There are a number of reasons why it can be important to value a business. Among these, some of the most important can include regulatory compliance, reporting transparency, and taking an approach that emphasizes data-informed knowledge.
Whatever the reason, valuing a business can be quite complex and can involve processing a large amount of data—from numerous sources. It can also be important to ensure a high degree of accuracy, especially if the valuation is part of a potential deal—or to the ends of regulatory or legal compliance. CPAs can be extremely helpful to the process, assisting businesses in accurately valuing themselves.
It’s important to note that different CPAs and CPA firms will often specialize in different areas. Some firms and CPAs may not specialize in all the areas that we’ve discussed, and likewise, some may specialize in areas we haven’t even delved into. Some additional areas CPAs can specialize in that go beyond traditional bookkeeping include:
- Forensic Accounting
- Risk management
- Broad economics
- And more
A partnership with a CPA can often prove to be an invaluable relationship. It may simply be a matter of seeking out CPAs and CPA firms whose services align well with your needs as an organization.
The Bottom Line
CPAs can assist organizations in far more than just traditional bookkeeping. Rather, they can help companies better understand their financial position, remain compliant with reporting requirements and tax laws, identify key trends and forecast financial standings, value businesses, and even offer advice in areas such as budgeting planning and cost-optimization.
If you’re looking for effective accounting and consulting solutions, don’t hesitate to reach out. At Dempsey Vantrease & Follis PLLC, we provide services in a number of accounting areas, including auditing and accounting, bookkeeping, tax services, business consulting, and valuation and litigation support. Over the last four decades, we’ve provided businesses just like yours with the tools they’ve needed to succeed. To learn how we can help you, get in touch today.