Is your business expanding rapidly and it is becoming hard to keep track of the finances? This challenge is common in small businesses that grow fast without corresponding growth in human resources. Many small business owners overlook or can't afford to hire a full-time accountant. But a CPA-qualified accountant is crucial in ensuring sound financial management practices. They also help the business navigate various legal and financial requirements to avoid trouble. When do you need CPA services?
1. Writing a Business Plan
You need to write a business plan when starting or expanding a business. You will need the help of an accountant because a good business plan requires expertise in finance and accounting to write a financial section.
Also, the plan will be used to present your business idea to potential investors. An accountant can adequately communicate your idea and convince potential investors that your business will succeed.
2. Changing the Legal Structure
You may need to change its legal structure when the business grows adequately. For example, if you want to sell shares or raise investors' funds, you may have to convert into a corporation or limited liability company (LLC). CPA services can help with this process and ensure that everything is done according to the law.
3. Writing Financial Reports for Investors
If you need to raise funds, you will need to present financial reports to your potential investors. You will require the help of an accountant to prepare the cash flow statements, balance sheet, and profit and loss reports.
Investors will use your financial reports to evaluate your business and decide whether to invest in it or not. CPA services can draft accurate and reliable reports for investors to use in decision-making.
4. Selling or Buying Another Business
When selling or purchasing another business, you will need the services of an accountant. An accountant has experience valuing businesses and ensuring that the sale goes through smoothly. They can also advise on how much you should be paying for the business and how much money you need to raise.
5. Preparing for IRS Audit
You could face an IRS audit by chance or for red flags in your tax records. For example, if you have made some errors in your tax return or missed reporting some income. In such cases, you will need the services of a qualified accountant who can represent you at the audit. They can also advise on responding to any issues raised by the IRS.
Are you worried about your business's financial health? Talk to CPA services to ensure your business is financially and legally compliant.