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10 Questions to Ask When Working With an Accountant

startup business questions for cpa

If an audit is triggered, it’s vital to have documentation and rationale for the most significant deductions. Still, it’s not uncommon for an auditor to ask for receipts for more minor expenses. Having the right accountant isn't just about crunching numbers; they're one of your most important collaborators. In this final question, the accountant can fill in any gaps you might have missed. You will be able to round off your conversation while getting some more valuable advice from your accountant.

  • But, it all starts with you knowing what kind of questions to ask an accountant.
  • This might seem like too simple a question, but clear, effective and frequent communication is the key to a healthy, beneficial relationship with your accountant.
  • Meeting with your accountant gives you an opportunity to pause and take that step back.
  • Call us today to get a free price quote so you can focus on growing your business and leave the shipping to us.
  • I am CPA that specializes in working with small business owners in the areas of accounting, bookkeeping, & taxes.

While most tax professionals don’t offer recommendations here, having adequate policies to cover potential loss is important. Work with your team to ensure you have comprehensive protection to minimize risks against your company’s financial health. Your financial team can help you project the cost of setting up your new business. This will include costs related to establishing the physical business and paying for supplies. Your initial investment generally will be the highest amount put into the company by the founder, but it changes significantly from one company to the next. Also, consider your personal expenses and knowing what you need on hand to manage expenses at home with leaning on the business too soon.

Starting a Business? Here's How a CPA Can Help

As hard as it is to navigate the bookkeeping, taxes, audits, etc., for your business, hiring someone to help guide you through this process is worth every bit of financial cost and mental focus. Another way your accountant can help nail down your business's value is by deeply understanding what you do and the industry in which you operate, Katz says. Your account should be able to analyze a number of metrics to calculate whether your business is making a profit or a loss.

One of the primary purposes of having a CPA is for tax consultation. Ask how often this person recommends a meeting to discuss taxes. You should meet at least at mid-year after the June financial statements are prepared, and some firms recommend meeting every quarter. It is far better to pay a little more to meet several times a year than to wait until the end of the year and find that you have a tax problem.

Questions to Ask Your CPA When You’re Starting a Business

It also means dealing with state returns and deposits where applicable. Most small business owners want to know if they can write off restaurant meals as business expenses. In most cases, it is a lot simpler to pay over a lump sum to your personal account each month if you wish to draw income from your business.

What questions should I ask my CPA partner?

Who was the best accountant or professional you ever worked with, and in your opinion, what made that person so great? What is the most enjoyable part of your work? What are your interests outside of work? What would you most like to achieve this year?

Knowing your break-even point is crucial to determining your business's pricing structure and profitability. Once your accountant helps you identify yours, you should have a strong estimate of how many how to choose the best startup cpa service products or hours of service you have to sell to cover your costs. Properly projecting your business's cash flow is as essential as creating an effective mission statement and living up to it.

What is Accounting?

No one wants to start a business with the idea of going out of business. But you do need to have a plan B in case your original course of action doesn't go as you envisioned. A huge responsibility of becoming an employer is classifying your employees. Misclassifying your workers could lead to tax problems and penalties. Thankfully, asking your accountant for assistance can help you avoid worker misclassification issues.

Insights from a CPA on the Employee Retention Tax Credit - NFIB

Insights from a CPA on the Employee Retention Tax Credit.

Posted: Wed, 15 Mar 2023 07:00:00 GMT [source]

Assuming you’ve already found an accountant you want to work with, what questions should you ask? We cover the top questions to ask an accountant to arm you with the info you need to make better business decisions. Revisit this question from time to time to ensure your business is staying up-to-date with new tax laws and regulations. There are major differences between W-2 employees and independent contractors. With an employee, you are responsible for withholding and remitting payroll taxes.

Tax Questions: Do I Need to File a Return Even If I Don't Owe Taxes?

So you might want to ask whether they’ve worked with them personally or know someone who’s had a positive experience. Your accountant serves as a trusted advisor to several clients, so they’re privy to the inner workings of many different companies. They’ve seen business owners struggle and seen them thrive, so while they won’t share any confidential information, they can offer valuable perspective.

startup business questions for cpa

However, while you can use your business accounts or petty cash to pay for personal expenses, this is not always advisable. According to a survey conducted by QuickBooks, 48% of business owners named taxes as the most challenging area of running a small business. The first step when interviewing potential candidates is to make sure you’re on the same page about what your business needs from an accountant. Since CPAs wear so many different hats, be direct about what your business is looking for and how long a contract would last. This allows CPAs to figure out if they would be a good fit for your business and will help you focus on hiring an accountant who has the right skills for the job.

Questions to Consider Before Starting a Business

For that reason, it’s useful for providing financial information to investors or making decisions related to business growth and scaling. Working with tax and accounting professionals is the most important decision any startup founder needs to take long before any commitments are made. It is here that you will formulate the success for your company.

However, most of these things are easy to maintain, and you can partner with a professional accountant to help you organize and optimize your records. Maintaining the necessary financial records is a crucial element of startup accounting. There are five reports you’ll need to create and update, so we’ll start with those. Qualifications for accountants may include a bachelor’s degree in accounting or a Certified Public Accounting designation.

What are my tax obligations?

To make sure you understand your tax obligations, ask your accountant what they are. Each structure has its own set of rules when it comes to taxes and legal liability. An accountant can discuss the legal structures in depth to help you determine which one is best for your business. Your accountant can also assist you with filling out the correct documents for the legal structure you select. As a business owner, one of your main goals is to maintain a healthy (and positive) cash flow.

startup business questions for cpa

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