Let’s say that you’re running a business – or even just planning to start one here in Virginia. You have a sound business plan, and you’re reasonably financially savvy. But you know that there are limits to your financial knowledge, and you’ve started to wonder, “Could a CPA help me manage my business finances more effectively?” The answer surprised me, so it might be helpful to you, too.
In order to know if a CPA can help you, you need to understand the range of services that they provide. Even today, many people have the misconception that they just handle accounting and taxes – balancing books correctly, and making sure that best practices are followed. Until recently, that’s just what I thought. The reality is that they handle a much wider range of services that includes just about anything that has to do with finance.
If you’re planning to start a business, you’ll need to establish healthy practices from the very beginning. Trust a CPA to show you the financial data you’ll need to track, the tools to gather that data, and the insight to properly interpret it. You may also need help finding the right dividing line between business and personal finances; a CPA can make this murky line clear, and move it to your best advantage.
CPAs can be equally valuable if you’re already running a business – even if your accounting books and taxes are already in good hands. This was my situation when I began researching CPAs here in Richmond. I sensed that my profit margins were a little lower than they should have been, and thought there might be some ways to improve them. I didn’t know what to change, or if a CPA could even help, but I thought I’d find out.
Now I know that a CPA can help you look into the future, avoid pitfalls, and leverage advantages – even if they’re not strictly accounting-related. For example, a CPA might suggest re-negotiating credit terms with vendors – perhaps extending the payment window or instead seeking a discount for paying early.
That’s exactly what my CPA did for me. My business’ cash flow was pretty good, and I was able to leverage that by paying two of my key vendors more quickly than I had been. In return, both vendors offered me discounted pricing; in the short term, I have less cash on hand, but that discount immediately boosted my margin. It wasn’t the kind of advice I was expecting to get from a CPA, but now that I know better, I’m looking forward to more smart insight from mine.