Here’s why you might be required to outsource CPA services for startup businesses. You can’t hire an in-house accountant for your startup, as that might prove too expensive. As a business owner, your time is essential, and you have crucial things to focus on to lead your startup.
Therefore, although you might have the skillset and knowledge to manage accounting operations, you cannot spend your time on it. Outsourcing to Certified Professional Accountants services remains the only viable option for a startup and small business.
While it might not be obvious, outsourcing to a CPA firm has plenty of benefits. Let us explore why startups are choosing to outsource their accounting to CPA firms and how to do it in easy steps.
Who are Certified Public Accountants?
A Certified Public Accountant (CPA) is an accountant whom the government licenses to provide accounting, financial, tax preparation, and analysis services. They also have the right to represent the taxpayers before the Internal Revenue Service provided by the Department of Treasury.
While Certified Public Accountants are also accounting professionals, it is a designation given to licensed accountants. The Board of Accountancy of the respective state provides the certification in the USA.
A CPA must have the required educational qualification and pass a rigorous exam before they become one. According to the American Institute of Certified Public Accountants (AICPA), a CPA is an expert in domains like public accounting, business and industry, government, education, non-profit organizations, etc.
Given their skills, qualifications, and competence, it is not surprising that most businesses and startups seek to work with a CPA instead of a general accountant.
Getting to Know CPA Services and Firms
The CPA firms consist of many certified accounting professionals who perform a variety of tasks. The CPA or CPA firms cater to the accounting and financial requirements of the businesses.
They offer various services like accounting, bookkeeping, tax preparation, audit and assurance, etc. A certified public accountant:
- Organizes and maintains financial records
- Prepares the tax returns
- Evaluate the financial records and statements
- Provides assurance and financial forecast
A certified public accountant intimately understands the company finances. This puts them in the best position to analyze the company’s financial health and give opinions and suggestions on it. The CPA can help a business improve performance, set financial goals, and achieve them.
Here’s Why Startups are Choosing to Outsource Their Accounting to CPA firms
Now, why would a business such as a startup or small business outsource to CPA firms? The increasing custom to outsource CPA services for startups is to save on business expenses. Startups lack employees who can organize and manage the company’s finances. As several business operations like tax preparation and filing are seasonal, hiring an expert accounting professional and paying them all through the year is not advisable.
Instead, they should outsource certified virtual accounting services for startup businesses to accounting firms. This allows them to pay only as per the requirement and save considerably on deductible business expenses. Moreover, outsourcing to CPA firms is much cheaper than hiring an employee and comes with additional benefits.
Top Reasons to Outsource CPA Services for Startup
Outsourcing CPA services for startups and small businesses remains the best option. Let us take a look at the top reasons why, instead of hiring in-house accountants, one should outsource CPA services for startup businesses.
1. Cost Reduction
Hiring an accountant and maintaining an in-house team costs significantly to the organization. On the contrary, outsourcing accounting services to a CPA firm is quite inexpensive.
Moreover, the company doesn’t have to spend on maintaining a team, employee benefits, or company infrastructure for the accountant. The CPA firms charge considerably less and allow startups and small businesses to dedicate their hard-earned money to growth.
2. Competitive Advantage
The CPAs are renowned for their competence, knowledge, skills, and expertise in accounting and financial operations. A reason to consider outsource CPA services for startup is to benefit from this.
Which gives the startup a competitive advantage in the industry. The CPA firms have the know-how of advanced financial technology, accounting software, and tax regulations.
3. Reduced Management Responsibilities
The management cannot focus on business analysis and leadership if it has to spend a great deal of time and attention on financial operations. Once startup and small businesses outsource accounting operations to CPA firms, they don’t need to worry about everyday bookkeeping or tax preparation.
This considerably reduces the responsibilities of the management and allows them to dedicate their time and efforts to crucial leadership activities.
4. Access to an Extensive Team
A startup or small business is in no position to hire more than a few in-house accountants. In most cases, employing more than one accountant would cost a significant portion of the startup’s income.
The top reason to choose outsource CPA services for startup businesses is to gain access to an extensive team of accounting experts at these firms. The CPA firms have expert professionals and technology to help startups address financial complications efficiently.
5. Streamline Financial Operations
Most small businesses and startups are not organized, and their financial operations are not streamlined. This inhibits the analysis process and affects management’s ability to manage, forecast and enhance business performance. CPA firms use professional accounting systems and software that streamlines the business finances for a startup.
6. Grow with Powerful Business Analysis
When you choose outsource CPA services for startup business, you can benefit from business insights, financial reports, and analyses the CPA generates.
This allows your startup to track cash flow, increase profitability, and enhance company performance. The business can easily spot the areas where they are wasting or losing money and spend it on more viable areas.
7. Simplified Record Keeping
Most of the small businesses and startups in the USA struggle with maintaining financial records accurately. They don’t lodge all the transactions regularly and lag behind in bookkeeping.
The result generally is inaccuracy in accounts, financial reports, tax returns, and missed tax deadlines during the tax season. While hiring an employee to maintain records and prepare taxes throughout the year might be quite expensive, outsourcing to CPA firms can solve this problem.
8. Security for Business Data
The physical documents can easily be lost, misplaced, tampered with, or stolen. However, once stored digitally, the business data remains secure and protected from unapproved access.
The CPA firms use cloud accounting and cloud based financial technology to process, store and move business data. This gives the company data a high level of security. Moreover, data backup helps the company in case of data loss or corruption.
Tips to Choose the Best Outsource CPA Services for Startup Business
It can be quite challenging when you begin outsourcing the accounting and financial services to a CPA firm. You’ll need to explore the available CPA firms, go through a vast, daunting list, and check out their services, features, and prices.
What’s more, you’ll need to make sure the information you get on the internet and web pages is reliable. In simple words, you should be able to trust the CPA firm with your business operations.
To help you out in this situation, we have compiled a list of tips which should help you approach the whole outsourcing thing more professionally.
1. Keep Your Requirements Clear
Take some time and conduct a discussion to understand your business. The goal is to make a list of services that you need from the CPA firm.
Make two lists of high-priority and low-priority services, and make sure to revise them through some days to include everything. This will help you to look for the CPA firms that fit the most suitable for your business requirements.
2. Do Your Homework
Now, find the information on reliable CPA firms you can outsource. You can search on the Internet, or ask your friends for references. Search about these firms on different platforms and websites, and read clients’ reviews.
This will give you an insight into their services. Remember to look for CPA firms that provide the satisfactory services you require at an affordable price.
3. Choose Wisely
Research different CPA firms and contact them to know more about the services and prices. Before going ahead, make sure you understand the way they work. You can communicate with them, ask them important questions, and get to know about the software they use.
Remember to choose wisely and not fall for just some shiny features. A wholesome package is one that can meet most of your business requirements and aid your business growth.
Outsource Accounting Services for Startups
If you are looking for outsource CPA services for startup, you are in the right place. We are the most reliable accounting services provider with a history of happy clients. Our mission is to serve small businesses with integrity and professionalism and help them experience consistent growth.
Take a free trial now and experience our accounting services at no cost. Dial +1(800) 580-5375 and connect with our advisor!