For a small business to survive in today’s competitive environment, its finances should be set up in a profit-driving way. Sound financial resources are the foundation of any effective, profit-generating business. Creating a solid financial foundation takes time and effort, especially when it comes to accessing capital and finding ways to grow without losing profit in the process. Regardless, small business owners aren’t alone. One sometimes-overlooked business partner is a business’s Certified Public Accountant (CPA). A CPA has a deep understanding and a unique view of the business, and provides valuable insight while also helping the business tap into its growth potential. Here we look at five ways investing in a small business tax accountant boosts the bottom line.

1. Help With Loan Approvals & Capital Financing 

If growth is the next step in a business (whether that be to start-up or expand), it typically needs to be funded by some sort of capital. A small business accountant who understands the business’s financial position can provide insight into available and fitting capital-raising opportunities. They also help gather data, provide reporting on the business’s current financial status, and even help complete loan applications. 

2. Analyze Contracts and Agreements

When business owners face a new expansion, agreement, or other growth opportunity, it’s a widespread practice to have a lawyer review the contracts associated with it. But, it’s also a good idea to have a CPA review them, too. Many big changes in a business cause tax or accounting implications that might not be present upfront. Accountants have a deep understanding of tax laws and will look for any unexpected consequences (or outcomes) before the agreement is set in stone. 

3. Guide Small Business Succession Planning

Every entrepreneur puts their sweat, blood, (and tears) into their business. Everything about their business is on their mind day in and day out. But, even so, most don’t think about what happens when they pass on or retire. What happens to the business next? 

Succession planning is the best way to ensure there’s a solid future and path for the business, even after the business owner is gone. Small business accountants are financial strategists who identify ways to mitigate taxes and ensure your money goes where and to whom it should.

4. Increase Profits and Reduce Expenses with a Small Business Tax Accountant

Small business owners wear many hats, and are constantly being pulled in many different directions. It can make it difficult to find the time to step back and see the big financial picture. Working with a reliable small business tax accountant provides financial management peace of mind. CPAs are consistently watching the business’s revenue and expenses. They see a small business through and through. Because of their position, they identify expenses that aren’t necessary. They can also generate reports to determine the most profitable customers or service lines, and provide financial advice for how to increase profits. 

Small business accounts also help business owners develop a profit-first financial strategy. Rather than traditional bank balance accounting, real-time accounting gives business owners unique insight into their finances, and control over how much profit they make. For entrepreneurs, that means more time to focus on other things and more opportunity for growth.

5. Determine How to Grow

Business growth is only good when it takes place at the right tempo. If a business grows too slowly, it might miss valuable opportunities. If it grows too fast, it might not be able to meet customer demand. In both scenarios, when growth doesn’t occur at the right pace for a business, hiccups happen. Small business accountants can interpret a business’s finances and operations and provide advice on how fast (or slow) to grow. They analyze the numbers to determine what timing is right for important decisions, such as expanding a product or service offering, hiring new staff, or moving to a new location. They also help keep the business scalable by considering the finances and how to balance the growth profitably. 

While an accountant helps a business grow at the right place, they also help the business determine how to grow. As mentioned, accountants help identify the most profitable service lines and customers so entrepreneurs can go after them. Some small business owners think finding new customers is always best, but in some cases it may be more cost-effective to increase business with existing customers. 

In short, a small business moves forward in the best way when it has sound financial planning. And sound financial planning comes from partnering with a small business tax accountant who provides strategic, valuable insight to boost the business’s bottom line.

Work With Tolbert CPA – Small Business Tax Accountant

Schedule a meeting with us to learn more about how our small business accounting and tax preparation can set you up for the long-term success you deserve. 

Interested in learning more? Check out our Entrepreneur’s Guide to Accounting, where you’ll find helpful articles and resources to grow your business.