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Finding a CPA for Your Small Business

Finding a CPA for Your Small Business
Lauren Ward
Lauren WardUpdated November 13, 2021
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Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.
There are many CPAs, or certified public accountants, who specialize in small business finances, making it easy to find the right CPA for your company. What may be more difficult is determining what you want them to do, since CPAs can do a lot more than file taxes.Before you start emailing potential CPAs for your small business, ask yourself where you could use some help and consider how an accountant’s assistance with your business finances could set you up for better growth. 

Does Your Business Need an Accountant?

There are many factors to consider before hiring an accountant. Here’s what they can do and how to know when it’s time to find an accountant for your small business.

What Accountants Do

What does a CPA do for a small business? A certified public accountant can offer knowledge around basic small business accounting, which includes skills such as:  
  • Preparing personal and business tax returns and filing them on your behalf
  • Preparing the documents needed to submit a loan or grant application
  • Helping your business manage its day-to-day finances and cash flow
  • Notifying you of clients and customers who have a habit of paying late
  • Warning you about increasing costs that may affect your business, as well as helping you find affordable alternatives
  • Analyzing daily, weekly, monthly and seasonal cash flow patterns in your business
  • Illustrating key financial ratios for your small business
  • Recommending areas to consider expanding or shrinking your business 
  • Helping you establish a weekly and monthly budget for your business
  • Taking care of your company’s payroll
  •  Helping you prepare financial statements for shareholders
If you need something more specific, contact a CPA and ask if they can do it. You may find they can help you with your unique issue, whether it’s accrual vs cash accounting or essential business cash management tips

When You Might Need a CPA

Here are some common business scenarios in which you may need a CPA to help you out:You need to change your business classification: Besides finding deductions and tax credits, a common reason to need a CPA is when you have to change your business structure. As a business owner, there are a few options when it comes to how you can structure your business, which we outline in our small business creation guide. A CPA can help you choose the best structure for your business so you’re not overpaying come tax time. Even if you decide you don’t want to make a change, an accountant may be able to help you save in your current structure. Your business is growing: When a company grows, its finances become more complex. As more money comes in and goes out, and you begin to work with more vendors and hire more employees, cash flow can be difficult to keep track of. A CPA can help you with this by staying on top of payments, payroll and everyday expenses. Too many small business owners try to save money by not delegating tasks that a CPA can do, but the truth is that CPAs very often save businesses money, leaving the business owner more time to do what they do best — come up with great ideas and make money doing it.You don’t understand taxes, deductions and tax credit: You may be a wiz at making money and acquiring new customers, but if taxes are like another language to you, then you need a CPA. It’s not that it’s beyond your ability to learn, but the more time you spend working on it, the more time you’re taking away from your business. Moreover, each year many business owners make mistakes, such as overpaying on their taxes.You need help preparing financial documents: Whether you are selling your business or plan on applying for a business loan, a professionally prepared financial report by a CPA can make the process go more smoothly. When applying for a loan, a CPA can directly answer any lender’s questions about your financials.You’re being audited by the IRS: Small business audits are common for businesses with complicated tax returns. High income and excessive expenses are two major triggers for an IRS audit. A CPA can help the audit process by providing the necessary documents if and when an auditor requests them, allowing you to focus your attention on running your business.  

4 Steps to Finding a CPA for Your Small Business

Wondering how to find a good accountant for your small business? It boils down to these four steps.
  1. Ask fellow professionals in your circle: Business owners wondering how to find an accountant for their small business should start with their peers — meaning, before you search for local CPAs online, ask friends or colleagues if they have any suggestions. Your colleagues will have a handle on what you need and can offer feedback on CPAs they’ve worked with. 
  2. Check social networks: If no one has any suggestions, don’t hesitate to join a local business community on Facebook or LinkedIn and ask how to find a good CPA for small business. It’s not necessary for your CPA to be local, but it could be beneficial if they are, especially if they have connections with local banks.
  3. Guarantee they are still certified: CPAs must renew their license every three years. Tax laws change frequently, so don’t work with someone who hasn’t bothered to keep their professional license up-to-date. A fast and easy way to do this is to verify they are listed on your state’s CPA database. 
  4. Conduct an interview: Schedule a meeting with a CPA to discuss why you are seeking their services (making sure you ask the questions below). Not all accountants specialize in the same things, so it’s very possible they may direct you to another CPA who is better suited for your needs, or you may feel a need to continue your search.    

Evaluating an Accountant

While interviewing a potential CPA, ask a wide array of questions and get to know the person you may work with. If you have a good rapport with one another, your interview should become less of a test and more of a discussion of the ways your business can grow and expand.   Questions you should make sure to ask include:
  • What is their cost? Do they charge by the hour, or do they have a flat fee?
  • Do they have a team? Some CPAs work by themselves or have a team underneath them. If they have a team, you’ll want to know their qualifications.
  • What’s their availability and typical turnaround time? How quickly can they get back to you if questions come up? How much of their time will you get?
  • How long have they worked as a CPA? Are you their first client or have they worked with hundreds of clients like you?
  • Can they provide references? Even if you became acquainted with your CPA from a friend, it’s never a bad idea to get more references if you can. 
  • Will they represent you during an IRS audit? Having a professional explain your finances to the IRS can be a huge weight off your shoulders should you ever be audited.
  • What type of services can they offer? It’s possible they can help you with something you haven’t thought of. Get a full rundown of everything they do — you may end up hiring them for additional services that can help you run your company.

The Takeaway

Finding an accountant for your small business can be a huge weight off your shoulders and allow you to focus more on the business side of things. Just make sure to do your research and due diligence to ensure you find a good CPA for your small business.Once you find an accountant for your small business, the next step may be getting additional financing to grow even further. Lantern makes comparing different small business loans easy — all you have to do is fill out one simple application.
Photo credit: iStock/kate_sept2004

About the Author

Lauren Ward

Lauren Ward

Lauren Ward is a personal finance expert with nearly a decade of experience writing online content. Her work has appeared on websites such as MSN, Time, and Bankrate. Lauren writes on a variety of personal finance topics for SoFi, including credit and banking.
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