When you hire a CPA your expectation is that they will help you file your tax return; but did you know that your CPA should be doing so much more than that? How to avoid financial missteps, including unwise tax decisions, cost-saving organization tips and tax budgeting are only some of the subjects your CPA should be discussing with you throughout the year. In our humble opinion-a minimum of four times a year.
Here are six ways that quarterly meetings with your CPA can make a big difference for your business.
- You’ll stay informed on any tax law changes that impact your business.
Being out of the loop on the latest tax laws (especially with The Tax Cuts and Jobs Act of 2018) can hurt your business. The worst-case scenario is that you wind up paying more in taxes than you need to, or missing a deadline and getting hit with fines. Your CPA can clear up any questions and help you set up a plan of action to ensure you are making the right decisions for your business.
- You can ensure your quarterly payments are accurate.
Estimating and paying your quarterly payments can be an incredibly complex process that could have big repercussions for your business. Estimate too little and you could end up with a big, unplanned payment or additional fees. Estimate too much and your cash flow can end up strangled.
- You can keep track of important deductions.
Small business deductions can lighten your tax load, but they require documentation. The right kind of documentation. Plan in a regular meeting with your accountant so you can discuss purchases and new expenses, find out which qualify for deductions, and get details on how to document each one.
- You’ll get advice on the tax implications of internal business changes.
Are you planning to hire new employees? Are you investigating new insurance options? Is it time to explore your options on how to compensate high performing team members? Changes like these can alter how you’ll need to do your taxes, what you owe, and when you owe it.That quarterly meeting ensures that you don’t overlook the benefits, or the costs, of these changes, so you can ensure you’re making informed decisions and can see how they affect your bottom line.
- You can discuss the timing for when to buy and when to claim depreciation.
Major purchases for your business may qualify for a depreciation value, but the timing on how to claim that depreciation value varies. New businesses can claim capital expenses, but they have to spread them out over time. Your accountant can help you figure out the best timing as far as when to buy, and how to claim, the assets that you need for your business.
- You can ensure that your records and documentation are always in order.
A quarterly meeting is an ideal time to provide up-to-date financial statements to your CPA; save yourself the stress of a year-end scramble. If your CPA is current on what is going on in your business throughout the year, it enables them to plan forward rather than backwards.
Keeping up with taxes and finances can seem like an overwhelming job. Quarterly meetings break the process into doable bits, and help you gain the knowledge you need to make informed, well thought out decisions.
Make sure that when you are deciding on your CPA to take the time to ask them about how they view quarterly planning meeting and whether they charge for them. Many firms will charge on an hourly basis, but there are some firms that understand the value in these meeting and will include them in their tax fees. The long-term benefits for your business, not to mention your peace of mind, can be enormous.