From Stress to Success: When to Hire a CPA

Are you still wrestling with spreadsheets and tax forms each year? If you’ve ever found yourself buried under a mountain of receipts or confused by the complexities of financial regulations, you’re not alone. 

Many entrepreneurs and small business owners face these challenges daily. But what if there was a way to alleviate that stress while optimizing your finances to save money in the long run? Enter the CPA—a Certified Public Accountant specializing in crunching numbers. 

Hiring a Certified Public Accountant (CPA) for your bookkeeping and taxes isn’t just a line item on your budget; it’s an investment that can pay off handsomely. However, that is not your only option.

From uncovering hidden deductions to ensuring compliance with ever-changing tax laws, doola Bookkeeping comes with much-needed financial tools and support from skilled CPAs to save you valuable time—and money. 

In this blog, we’ll explore whether this strategic choice is worth every penny of your hard-earned cash. Buckle up—your path to financial clarity and peace of mind starts here!

Who Are CPAs and What Do They Do?

A Certified Public Accountant (CPA) is a professional trained to provide a wide range of financial services, including bookkeeping and tax preparation. They can do your books, prepare your business tax returns, handle your business accounting, and much more.

They have an in-depth understanding of accounting principles and tax laws, ensuring that all transactions are properly recorded, categorized, and reconciled. This not only helps businesses maintain accurate financial records for tax season but also ensures compliance.

They Make Bookkeeping Easy

The role of a Certified Public Accountant (CPA) in bookkeeping cannot be overstated. While bookkeeping involves recording financial transactions, accounting involves analyzing and interpreting those records to make strategic business decisions.

A CPA undergoes rigorous training and passes stringent exams to ensure accurate and organized financial records. They can review your financial statements to provide valuable insights into your business’s financial health and identify any discrepancies or irregularities.

Hiring a CPA gives you more flexibility for customization in bookkeeping. They can create different charts of accounts as needed, track financial statements monthly or quarterly, and keep your books ready for tax season. 

This will help you maintain accurate records throughout the year instead of scrambling during tax season. It will save time and stress while also avoiding costly mistakes that could result from rushed record-keeping.

They Prepare and File Tax Documents

If you file taxes as an individual, you can likely handle it yourself. But when you file taxes as a business, your circumstances are complex or involve a significant amount of work. So, hiring a CPA to handle the more complex documentation works to your advantage. 

With a CPA by your side, you can rest assured that your tax returns will be filed accurately and on time. CPAs double-check all calculations, deductions, credits, and other vital details to ensure that your return is error-free.

This gives you an added layer of confidence since you have an expert on your side to prepare and file your necessary tax documents. They also offer one-on-one advice on how to optimize your tax return and utilize all the credits and deductions available to you.

They Help with Tax Planning

CPAs can develop a personalized tax planning strategy that aligns with your long-term financial goals. For instance, they can help you make smarter investment decisions that are eligible for deductions to minimize your tax liability while maximizing your returns.

They work with you throughout the year, analyzing your financial situation and offering personalized strategies that can help reduce your overall tax liability. Their proactive approach ensures that you are prepared for any changes in tax laws or opportunities for savings.

Likewise, if you’re saving for retirement, they can assist you in setting up a tax-efficient retirement savings account. They help you understand the tax consequences of these accounts so you can manage your retirement income better.

They Assist with Tax Audits

CPAs are the experts in IRS regulations and tax laws, so they can help you avoid any red flags that might trigger an IRS audit. They can act as an intermediary between you and the taxing authorities while protecting your rights against unreasonable demands.

Having a tax professional by your side during an inquiry or audit comes in handy since they know how to handle the questions the IRS might ask of you. This provides reassurance, knowing that someone who understands complicated tax documents is handling it on your behalf.

Hiring a CPA is like having an in-house, accredited advisor with deep accounting knowledge. So, you can utilize their expertise while forming the business, analyzing your business’s operations, and understanding your tax liability. 

The role of a CPA in tax filing goes beyond just filling out forms – they offer expert knowledge, accuracy, planning strategies, audit representation, and convenience.

Why Should You Hire a CPA?

Hiring a CPA to handle your bookkeeping and tax preparation is an unnecessary expense, especially for small businesses or individuals. However, the benefits of entrusting these important financial tasks to a qualified professional far outweigh the cost.

1. Saves Time and Reduces Stress

Bookkeeping and tax preparation can be time-consuming if you are not well-versed in accounting principles and tax laws. By hiring a CPA, you can free up valuable time without worrying about making mistakes or missing deadlines, which can lead to costly penalties.

2. Expertise and Knowledge

By hiring a CPA, you gain access to their expertise and ensure that your finances are handled correctly. They undergo rigorous education and training to obtain their certification. This means that they possess extensive knowledge in areas such as tax planning, audit representation, financial reporting, and more. 

3. Objectivity

Managing your finances can sometimes be clouded by emotions or personal biases. A CPA provides an objective perspective on your financial situation without any emotional ties. They will provide unbiased advice on how to improve your financial standing based on factual data.

4. Cost Savings

While it may seem counterintuitive at first glance, hiring a CPA can actually save you money in the long run. With their expertise in taxes, they will ensure that you take advantage of all available deductions and credits while also avoiding costly fines or audits.

5. Designed for Growth

As businesses grow over time, your finances become much more complex. A CPA can provide valuable advice on various financial strategies that can be implemented to support and drive growth for your business.

Hands-On vs. Hands-Off: When Do You Need a CPA?

You may ask yourself why it is necessary to hire a CPA. Can’t you just handle it yourself or delegate the task to an in-house accountant? The truth is, while there may be cheaper options available, the value of having a CPA on your team far outweighs any cost savings.

According to a report, 89% of small businesses say they’re more successful when they have a trusted advisor like an accountant or bookkeeper. Hiring a CPA makes sense if you feel like being buried in documents and don’t want to spend six or more hours doing your bookkeeping.

So, how do you decide when you need to hire a CPA?

• When you no longer have the time to manage the financials.
• If your business has outgrown DIY bookkeeping and accounting methods.
• You need to catch up on your books.

Tax season can be quite taxing, especially if you haven’t kept your books straight. In addition to being behind on your taxes, there’s also the worry of audits or penalties for late filing. A CPA takes all of this from your hands and gives you peace of mind when doing your tax planning.

Plus, when your business grows, so do the scope and complexity of your books. They stand by your side during this time to ensure everything remains compliant and accurate. This hands-on approach allows them to be more proactive in managing their finances rather than simply reacting to issues as they arise.

What Are the Alternatives to Hiring a CPA?

With countless transactions to record, invoices to process, and tax laws to keep up with, it’s no wonder many businesses choose to hire a CPA for their bookkeeping needs. However, there is another option that has been gaining popularity in recent years – outsourcing.

This generally involves sending them all of your financial documents and relying on them to keep accurate records for your business. It is an attractive option because it takes the burden off your shoulders and frees up time for you to focus on other aspects of your business. 

However, one major downside is that you have less control over the accuracy and timeliness of your financial records. You are essentially entrusting someone else with crucial financial information about your business, which can feel risky.

On the other hand, getting a dedicated bookkeeping software or platform offers several advantages compared to traditional outsourcing methods. 

They can automate mundane bookkeeping tasks and free up more time for your CPA to focus on tasks that require their personalized attention.

Outsourcing vs. Bookkeeping Software

Moreover, bookkeeping software provides accuracy and efficiency that may not always be possible with outsourcing. These programs have built-in error-checking features that flag any inconsistencies or discrepancies, allowing you to catch them before they turn into bigger issues.

Manual record-keeping often involves piles of paperwork or numerous spreadsheets scattered across different systems. By storing your records electronically in one central platform, you can software save precious time and ensure that important documents do not get lost or misplaced.

Furthermore, implementing a bookkeeping software system allows for better collaboration between you and your CPA. Since both parties have access to the same set of data, it becomes easier for your CPA to provide real-time advice and analysis. This also eliminates the need to physically meet up or exchange files back and forth, as everything can be done through the software platform.

Another notable advantage is cost-effectiveness. While outsourcing can be expensive and often comes with hidden fees, platforms like doola Bookkeeping offer transparent and affordable pricing plans. This means you only pay for the services you need without any additional or unexpected costs.

Get the Best of Both Worlds with doola Bookkeeping

While hiring a CPA is a crucial step towards managing your business’s finances, investing in bookkeeping software is equally important. This is where doola comes in handy- providing an efficient bookkeeping solution along with the support of a dedicated CPA and bookkeeper.

With doola Bookkeeping, you can track your business finances in real-time, including revenue, expenses, and net profit, all in one dashboard. You also get the benefits of automatic transaction tagging and customized rules to save you time and reduce errors.

By seamlessly integrating your accounts with doola, you can track and categorize your business and personal accounts effortlessly, giving you a holistic view of your finances. You also get access to an up-to-date summary of your earnings and spending without waiting for final reports.

However, we understand that some businesses need additional support with their finances. Having our qualified CPA and tax advisors by your side brings peace of mind, knowing that your taxes are being managed accurately and efficiently.

They keep your transactions in order and provide monthly financial reports, keeping your finances in top shape. They also send you a complete tax package to file yourself or let us handle the filing for you.

Don’t let bookkeeping and taxes be a source of stress any longer; let doola help you achieve financial success effortlessly.

Book a demo today!