FAQs: New Business Questions
Should I consult a CPA if
I am starting a new business?
The no-brainer answer to this
question is a resounding “absolutely, yes!” Take
this scenario as an example: An entrepreneur is starting
a new wholesale clothing business. His employees will
work on a commission-only basis and will receive a 10%
commission for each successfully concluded sale. The
entrepreneur has calculated that he needs to secure an
order of at least $3,000 from each retail customer in
order to turn a profit. He needs to know if this minimum
order level is correct—that he’s not just flying blind.
There are many factors that
will affect his decision. He needs to take account of
the gross profit targets contained in his business plan,
the wholesale purchasing or manufacturing costs of the
garments, and what minimum order value the retail market
will bear. Also, before coming to a final decision, the
entrepreneur should consult a CPA so that he or she can
advise on the tax implications of the business, as well
how the minimum order level will impact the gross profit
levels. It is important that these business-critical
decisions are made early on and not at the end of the
year when it will be too late and any financial damage
to the business will have already been done.
Can
I save money by preparing my own financial statements?
Yes, you could—but is it a
sensible and productive use of your time? Is it a false
economy and could your time be better spent earning
money for your business? Equally, do you even have the
necessary expertise to prepare the statements in the
correct way? It is very likely, especially if your
business is in the growth stage, that money spent on
employing a CPA to prepare your financial statements
will be money well spent and will allow you to focus on
what you are really good at—your business growth
strategy.
How can an accountant help
me as a new business owner?
There are many ways in which
an accountant can assist a new business owner, and they
do not all have to do with number crunching. Here is a
list of tasks that an accountant can undertake to
support your business:
- Developing budgets and
financial forecasts.
- Researching and setting
up the most appropriate accounting systems.
- Providing input into
your strategic business plan.
- Consulting on other
non-financial disciplines, such as information
technology.
- Assessing and
recommending management and employee benefit and
compensation arrangements.
- Analyzing operating
results.
- Preparing financial
statements.
- Preparing and submitting
tax returns.
A good Austin CPA or accountant can be a great help
in starting a new business. Their job is to track money
in businesses,
so they know some important things. Finding a good
general
business mentor is also a great idea. According the the
SBA, the
lack of professional advice is the number one reason for
a new
business to fail.