One of the most challenging aspects of owning a small business is handling the paperwork. Managing payroll, balancing expenses, and preparing tax documents can be overwhelming for some small business owners. For this reason, many turn to qualified CPAs to do the accounting work for them. Some have asked if it is better to use accounting software as opposed to hiring a CPA. While there are some minor immediate advantages that come from using accounting software, at the end of the day, the benefits of using a CPA are even more.
One benefit is that a CPA is going to use a professional grade software to tabulate taxes, payroll, and other financial issues. The software that CPAs use can sell for up to $6,000. It is exceedingly more complicated and more sophisticated than products that the average customer can purchase online. The software is designed to tabulate a business’s financial information in an accurate way, leading to accurate results.
A second benefit of using a CPA is that they bring with them the human touch. In the same a family doctor can get to know their patients over time, a CPA can develop a relationship with a business owner. They understand the business’s financial situation, and they understand their future financial goals. This means that they are able to provide tax saving suggestions that software just does not have the ability to understand or anticipate. For example, a CPA can sit down with a business owner and help them see how they can save money now for their child’s future education. They can also evaluate steps that business owners can take to minimize their capital gains taxes.
A third benefit of a CPA is that they are available to answer questions 365 days out of the year or when the client has questions or wants to learn more about a particular financial topic. Tax and accounting software are designed to provide benefits during the tax season. However, throughout the year the information they have could become obsolete.
A CPA is there when challenging tax issues arise. A small business owner may quickly find themselves in the middle of a business deal that requires a level of financial comprehension that is beyond their skill level. They can also work with the business owner and help them to make decisions that are in their short-term and long-term best interests.