You might have heard that with a little bit of money spent and a couple of extra hours of preparation at the start, you can save yourself from several weeks of trouble and loss at the end. In many business cases, this proves to be absolutely true, more often than not.
Thoughtful planning has shown us that time and time again that it is essential to success! Not only that but when we burn out at our jobs, doing everything that needs to be done in a day ourselves. Eventually, our bodies, brains, and businesses will suffer from that as well.
While the affordability and convenience of doing your accounting and books may sound good at first, you will quickly find that not using an outside professional bookkeeper for your startup may cost way more than you can afford to lose down the line.
Another warning, startups tend to face more complex tax and accounting issues and other unique situations. Complicated tax rules are just the reason why hiring an expert certified public accountant or CPA can save your business and save you a bunch of time and a whole lot of money. But what is a CPA, and what do they really do for a startup?
Related: Form 7200 Instructions
Try TaxRobot, Get an R&D Credit of up to $250,000.
Simple & Easy Setup for Maximum Returns.
What is a CPA?
Any person who does any accounting functions is technically an accountant, even if they do not have a college degree. However, a CPA or Certified Public Accountant is someone who has earned a professional designation through the combination of education, licensing, and years of experience. Basically, a super advanced level accountant. Think number Jedis.
What Does a CPA Do Exactly?
Certified Public Accountants are masters in their specific way, handling all the record-keeping and assuming the duties of filing tax documents. They are authorized and specialized in performing a wide range of accounting services for the public and their clients, including advanced accounting, management advisory, financial advisory, preparation engagement, taxes, and other consulting services.
Bookkeeping and tax filing are probably what first comes to mind when considering accountants. However, a CPA offers a host of other financial and advisory specialized services to help you improve your business, including:
- Business Consulting: If you are a business owner or executive, a CPA can benefit you by becoming your on-hand financial consultant. A CPA can navigate you through entity types like limited liability companies, sole proprietorships, and partnerships.
- Personal Adviser: They can also provide sound financial advice to help the business grow. They can determine where money is going out, and you will leak out less money.
- Selects Business Identities: They can choose and weed out other business identities for you when you are busy.
- Financial Forecasting: An expert CPA can assist you as you set up a business plan for the future. They can interpret your financial reports and give valuable real-time insights into your finances.
- Tax Planning and Preparation: These tax services include filing and preparing for federal, state, and local tax returns. Minimizing tax obligations and a CPA can even represent clients in court. Let’s not forget they can deal with payroll, tax returns, and sales and use tax returns!
Related: How R&D Credits Help With Payroll
- Forensic Accounting: Forensic accounting involves a wide range of skills and learned methods to determine whether there is trouble in your financial reports.
- Audits/Reviews: A CPA can help you follow GAAP guidelines and improve the quality of your financial information.
Is a CPA Different Than a Regular Accountant?
Yes, even if they do many of the same duties. They are very different and not the same at all. A professional accountant is great and will most likely have an excellent education, but a CPA is a certified accountant by law. CPAs are licensed by a governing body and must fulfill specific requirements to maintain and keep their license.
A Certified Public Accountant will be held to a different level and be asked to uphold specific professional standards under a strict code of ethics. CPAs are also held to a fiduciary standard, which means they must always put their client’s interests before anything else.
Unlike accountants, CPAs are expected to abide by the AICPA Professional Code of Conduct, which includes treating all clients with integrity, objectivity, and honesty and doing so while remaining free of conflicts of interest and personal opinions.
Get the best refund for your startup by using TaxRobot. Contact us today.
What Should I Look For in a Startup CPA?
There never is one perfect person to become your Startup CPA. That said, it is essential to follow a criteria checklist to find a CPA that matches you and your business goals.
- Step 1: A good CPA you want to work with should have experience working with businesses like yours, . fFamiliar with financial modeling and reporting, and is ready for tax season.
- Step 2: A CPA should be knowledgeable and organized.
- Step 3: A certified public accountant should be able to explore solutions with you and follow up on possible opportunities for the company.
- Step 4: Give you back timely responses and answer in emergencies.
- Step 5: Previous software knowledgeability with programs like Xero, Bench, or Quickbooks.
- Step 6: Look for a CPA that is both helpful and cost-effective in your budget.
There is no harm in asking the right questions before hiring a CPA or service, so you can find one CPA that is right for you and trustworthy in handling sensitive business data and tax forms.
Related: R&D Tax Credit Carryforward
While passion, grit, ambition, and hustle can make a new business grow, thoughtful planning is what is truly essential for survival. Poor financial planning is one of the top reasons startups fail, so the quicker you take ownership of your startup’s financial well-being, the better for business. The better you will be when tax season rolls around.
For taxes made easy, TaxRobot is here to help. Contact us today.