For a business owner, having too little money and having too much money can create similar problems. As a new entrepreneur, you wonder where to get money to fulfil your business objectives. And when you finally start making profits, you wonder what to do with the money you have: buy new equipment to ramp up production? Hire more employees? Or maybe you’re spending too much already and need to save. Each of these questions, and the decisions you ultimately make, has an impact on both your business operations and finances. One wrong decision could slow your growth. Instead of taking those risks, why not consult a Chartered Professional Accountant (CPA)?
Why do CPAs Make the Best Business Consultants?
A CPA isn’t “just another bookkeeper”: they are certified financial specialists who not only run the numbers for you but also help you analyze, interpret, and turn those numbers into business growth. A CPA can help you at multiple levels, from improving your operations to managing risks. Let’s see how:
CPAs Can Support at the Operations Level
Financial Reporting Dashboard
Every business has a financial reporting dashboard that gives you a clear idea of how your numbers are performing. From charts of accounts and financial statements to key performance indicators (KPIs) and cash flow, financial reporting provides essential information to make business decisions.
A business consultant can help prepare and monitor KPI’s and gather business insights from these numbers. But a CPA adds value by looking at KPIs beyond the formula. CPAs are trained to perform internal audits, where they learn about the company’s internal controls, how data flows through the organization, the systems they use, and the procedures process owners follow to report the information used to calculate KPIs. This helps them identify process gaps, assess risk, and offer specific insights. They focus on pain points instead of complicating the dashboard with unnecessary data.
Monitor Cash Flow
Many small businesses that shut down trace their failure to cash flow problems. Even if your business is raking in profits and has plenty of money in the bank, poor cash flow management can make day-to-day operations and expenses difficult, leading to unpaid bills, operational inefficiency, and reduced productivity.
A CPA can read between the numbers and decipher how to improve your cash flow. They prepare financial statements for companies using general ledgers, receipts, and invoices. They never take numbers at face value. Instead, they trace the money back to its source, identify where cash is or will be stuck and why, and suggest ways to smooth cash flow. It could be delayed payments from a particular client or inflated prices from a supplier.
Technology and Automation Support
A CPA stays current on the latest financial software and automation tools for expense tracking, invoicing, inventory management, and more. These tools drastically reduce human error, improving accuracy in financial reporting and, in turn, supporting better-informed, confident strategic decision-making.
After reviewing your business processes, a CPA can recommend software that fits your requirements, with the necessary security, privacy, and cloud storage features. They can help set up the system, customize it to your accounting and business needs, and conduct regular reviews to ensure report accuracy.
CPAs Can Support at the Financial Level
Manage Risk
Business risks do not always come from within. A sudden economic downturn, a geopolitical event disrupting supply chains, the loss of a major client, and other external factors also pose risks. Managing such unforeseen situations needs cautious planning.
A CPA prepares a contingency plan for these situations. A detailed review of your financial records, combined with their understanding of market dynamics, helps a CPA develop a feasible risk management plan. The plan includes an adequate emergency fund, relevant insurance plans, alternative suppliers and vendors, and necessary backup plans to keep operations and cash flow running smoothly despite the challenge. It also includes cost-cutting strategies to free up more funds for your emergency fund or other business activities.
Save Taxes and Stay Compliant
Understanding and managing tax complexities is undoubtedly a pain point for every business owner. Every business activity, be it buying new equipment, making new investments, or hiring employees, has a tax implication. DIY tax filing may have worked when you were a newly established small business, but it can be disastrous as your business grows and complexity increases. The less you understand taxes, the more you will end up paying.
A CPA is well-versed in tax laws and can help you save taxes in a compliant manner. They can help you take advantage of the benefits, deductions, and tax credits your business is eligible for. By ensuring your financial records are filed, categorized, and calculated accurately and on time, a CPA can help you avoid potential penalties.
Scenario Modelling
A successful business strategy places as much emphasis on future planning as it does on current performance. Studying historical data and observing current market trends to predict future scenarios and their possible impacts on the business helps you prepare for both risks and opportunities. Similarly, understanding the implications of even the smallest details, such as whether hiring two more employees will have a big impact on the cash flow, or whether offering a discount on a product will shrink profitability, or whether taking a $100,000 loan to enter a new market would be a good idea, requires in-depth analysis and superior forecasting skills.
A CPA is trained to build these scenarios and projections and test different combinations of assumptions to arrive at the most viable business solution. They can also determine the best- and worst-case scenarios for each, preparing the business for any outcome and planning well in advance to face it head-on.
A CPA’s purview covers everything from simple bookkeeping tasks to CFO-level functions. No matter what kind of financial fix you find yourself in, a CPA can work with you to find a solution that’s practical, financially viable, and legally compliant. Their ability to translate and transform business data into meaningful strategies sets them apart from general consultants.
Contact Ford Keast LLP in London, Ontario to Help You with Business Finances
Talk to a professional accountant to help you map your business needs, pain points, and consultancy scope to unlock your business’s true potential. At Ford Keast LLP, our accountants and business advisors can provide services such as financial reporting and analysis. To learn more about how Ford Keast LLP can provide you with the best accounting and bookkeeping services, contact us online or call us at 519-679-9330.
