Does a Small Business Need a CPA?

A Certified Public Account is a valuable tool for any upcoming and ongoing business, large or small. Larger Corporations have "in-house" accounting/bookkeeping using business accounting software on a daily basis. Usually, a CPA is hired to work on staff and oversees the accounting department.

The US Government considers a small business to have 99 or less employees. A business with only four or five employees can benefit from having a Certified Public Accountant retained. Although the CPA may not be involved with day-to-day business, he/she is available to answer questions, deal with complicated forms, file quarterly forms if necessary, and furnish the complicated year-end tax compilation information. Corporation year end tax is a complicated matter, for professionals only. A CPA is invaluable to the small business.

Don't want to become a CPA?

I never wanted to become a CPA. Furthermore, I never wanted to be a bookkeeper or an accountant. However, while owning and running a small business, it is inevitable that the owner must become familiar with the necessary forms, (especially payroll), profit and loss statements, balance sheet, and other reporting records.

Over many years, I had used various bookkeeping software. There is hundreds of small business accounting software programs and I became familiar with Peachtree Accounting Software, DacEasy Accounting Software, and finally Intuit Quickbooks. I was forced to learn accounting methods just to oversee employees recording and reporting. Intuit Quickbooks is by far the easiest program to use of the three I mentioned.

Finding a good CPA

Finding a good Certified Public Accountant can be difficult. It is better to ask friends or business associates for a recommendation. Still, it might become apparent that the individual or company is not doing what they said they would do, or provide. Fire them and look again. I went through four individuals and companies before I found a reliable firm that actually did the job they said they would do for our business. From that time forward, I was faithful to use them for my services. After many years of working with them, they are still providing the service, and we have become good friends. It is a definite "win-win" situation for the both of us. Trust takes time to develop.

Company records and the IRS

With no records or bad records a small business will find itself in trouble with the IRS quickly. Once on the IRS's "list" it is difficult to get off. I have made the list and from time to time have renewed my "status" there on several occasions! The CPA retained for the small business I ran, saved my skin. He would make statements like, "You know better than this", but would always straighten the mess out I had created. Once, I incorrectly filled out a 941 Quarterly form and it took two years to get that straightened out!

The CPA that I used, and still use, has not cost our small business any more in a year, than one month's salary for an in-house person. Over the years, his services have saved our business much more money than he has charged. I believe any small business needs a Certified Public Accountant retained.

Sources:
Personal Experience
How Stuff Works