6 ways a startup accountant can help your small business grow

Posted October 15, 2020

If you are a small business owner or startup founder, you may have hired a CPA to help prepare and file your taxes. But what you may not know is that some accounting firms also offer a number of advisory services that go beyond simple bookkeeping and taxes that help you reach your goals.

And since one of the core elements of accounting consists of analyzing and interpreting data about a business’s financials or operations, CPAs can be an important piece of your financial advisory team, assisting with strategic guidance to help you make informed decisions that impact your finances.

So if you’re wondering what exactly a professional CPA firm could do for your business? A Business Insider contributor Ashley Abramson, published an interesting article that explores a variety of different ways that an experienced CPA can be an instrumental strategic partner in helping a small business or startup continue to grow.

1. Review your documents and contracts

If you are going to sign any major contracts or agreements that may have possible tax or accounting implications, not a bad idea to have an accountant take a look or review them. Dewey Martin, Professor Emeritus from Husson University’s School of Accounting, told Business Insider “accountants can analyze the agreement and let you know about the tax and accounting consequences that will affect an individual’s or an organization’s financial prospects.” He went on to add that “their perspectives help their client avoid negative consequences associated with cash management, financial planning, financial statements, and insurance.”

2. Assist you in the loan process

Starting and running a small business comes with both responsibilities and opportunities. And one of these duties is establishing a business credit profile. Some small businesses rely on either personal or business credit to help take out a loan to finance the purchase of new machinery, acquire inventory, and expand their operations. Even recurring costs like payroll can be covered by short-term loans. Having a competent CPA who understands your financial position can help you present the purpose of the loan and consider various options for financing.

An accountant named Bryan Kressler told business Insider “once the client needs have been qualified, accountants can help business owners with the next phase of winning a loan.”

Oftentimes a small businesses CPA can assist them with gathering the relevant information and documents necessary for a loan, from quantifying the current financial condition and credit need to identifying repayment sources. With this data, accountants can also work with a client to craft a compelling financial picture on the loan applications that can improve the chances a bank will approve the request.

3. Assist with trust estate and estate planning

Since estate planning has tax implications, it is advisable that you consult with a credible accountant to make sure of your hard earned assets to go to your heirs or charity rather than the government. I just recently wrote an article about the current debate that affluent business professionals and families are having with financial advisors about accelerating their estate & wealth transfer planning strategies in preparation of a possible Biden Blue wave victory.

An experienced accountant and estate planning lawyer can provide several options and strategies that enable their clients to pass assets to their children and grandkids before they pass away or provide charitable / philanthropic strategies that allow non-profit organizations to benefit from a client’s generosity while minimizing the tax ramifications.

4. Business succession advisory planning

Large and small-sized family-owned businesses are the backbone of the U.S. economy. And while some statistics show that almost half of all family businesses are owned by “Baby Boomers” who have plans of retiring in the near future, some data shows that:

around 75% of the owners have no written transition plan
over 80% have no documented growth plan

So besides providing advice on financial decisions, a CPA can also help you shape the future direction of your business. Such as making succession transition plans, exit strategies, choosing a business entity structure and tax considerations if you would like to pass your business down to the next generation of family members or to employees.

5. Provide outsourced CFO services

If your business isn’t ready or large enough to hire a full-time inhouse CFO but you could benefit from seasoned financial guidance, you can outsource it. As a startup you can rent a part time or outsourced CFO consultant to interpret past and current financial results, and more importantly, chart the financial future of your business without having massive overhead costs of a full time employee on the payroll. From building financial models for a Series A funding round, to forecasting the pathway to hit your next milestone, a CFO consultant can provide necessary financial oversight.

Some of the things that they help with can include:

Analyzing financial reports
Reviewing your spending patterns and helping you to control expenses
Scheduling cash flows and business deficiencies to help your company achieve financial health
Educating the owner on how to manage the financial side of his or her business
Working with business owners to focus on key issues and work on them towards a solution

And during this Covid-19 pandemic the use of digital tools such as online cloud accounting software, video conferencing, and electronic document sharing solutions makes it easy to collaborate. Your accountant can help you make decisions regarding taxes, cash flow, strategy and a multitude of other things beyond simply paying them to file a tax return every April.

6. Help you figure out how to grow your business

If you own a business, you know your company’s success hinges on hiring the right people at the right time. Will Lopez, the head of accountant community at Gusto, told business Insider that accountants are perfectly positioned to help clients figure out how to grow their business with smart hiring. Mr Lopez said “by providing business owners with people-focused financial metrics each month, such as operating profit per employee and average expense per employee, accountants can help small business owners manage their greatest asset — their workforce.”

Conclusion

Could your Business benefit from expert help in Tax, Accounting, Business Advisory, CFO / Controller Services? Contact Huckabee CPA with any questions or for a free consultation.