Small business taxes are due soon, and if you put tax planning strategies in place, you might even pay fewer taxes this year. However, if you’re still doing all of your accounting or taxes yourself, it may be time to consider virtual CPA services.
A CPA will help you:
- Create a reliable accounting system
- Reduce taxes
- Fight back against an IRS audit
- Manage growth
- So much more
There are many reasons for choosing virtual accounting in Q4, but the following are some of the most common.
Table of Contents
6 Reasons to Consider Virtual CPA Services
1. Online Accounting is Cost Effective
Accountants can come to your business or you can go into their office with a stack of documents by your side. However, online accounting is a cost-effective solution that allows businesses to work with:
- Qualified, specialized CPAs
- Accountants that use leading technology solutions
In fact, 78% of small business owners in one survey would consider leaving their accountant for one that is more tech-savvy. Virtual accountants rely on the leading technology to bring world-class accounting to businesses without you ever needing to leave your office.
Hiring in-house is a major expense. Average costs to bring on a new hire range from $4,700 to much higher. Soft and hard costs exist, and if you work with a recruitment agency, they may charge as much as 25% of the salary in their own fees.
Online CPAs can provide the same level of service without the massive overhead.
2. You Don’t Have an In-House Accountant
SMB taxes are complex, but many owners still don’t have a “true in-house accountant.” Instead, they try to save money using cloud accounting solutions and hope they don’t miss a deduction or opportunity in the process.
Working with an accounting firm for small businesses is crucial for the longevity of our business.
Why?
You may end up missing growth opportunities and paying more in taxes than required. C Corporations pay a flat rate of 21% on net income, but pass-through entities can pay 0% – 37%. Virtual accountants can help you find ways to:
- Minimize your taxes
- Save time not having to do your own taxes or accounting
- Recognize growth opportunities and capitalize on them
Additionally, you may miss out on key tax changes in 2022 that can cost your business even more money. Accountants are experts when it comes to business, and their advice can be invaluable when it comes to increasing profitability.
3. Tax Changes: Maximize Your Deductions
Tax laws continually evolve, and they’re difficult enough for CPAs to manage. Owners that are not accountants are likely to miss key tax deductions or programs that can save their business a lot of money.
A few tax considerations to consider are:
- Employee Retention Tax Credit can still be claimed. You cannot pay wages to claim the credit any longer, but you can still look back on your payroll to see if paid wages between March 12, 2020, and September 30, 2021 (or December 31, 2021, for some businesses) qualify for the credit.
- Business meal deductions are back, and you can deduct 100% of qualified meals for 2022. You will need extensive documentation for this to apply, and a CPA will ensure you meet the qualifications to claim these expenses.
- Depreciation of assets or deductions on professional services – even the accounting you pay for – can be deducted. Bonus depreciation is something that is going to be phased out at the end of this year, so if you want to take advantage of it, speak with your CPA as soon as possible.
As CPAs, we ensure you comply with tax laws and pay what’s required, but we also minimize your tax burden so that you never pay more than is legally required.
If you don’t work with an accounting professional, you may miss out on key savings for your business. Paying higher taxes means less cash flow, slower growth, and missed opportunities.
4. You’re Struggling to Reconcile Accounts
Are your accounts reconciled? Virtual accounting professionals can help you navigate a mound of:
- Invoices
- Receipts
- Payments
- Etc.
It’s easy to have a backlog of tasks accumulate every month and become overwhelming. Managing cash flow is difficult when you have outdated accounts. Q4 is the perfect time to get your accounts in order so that you can transition into Q1 with all of your accounts reconciled. Without up-to-date books, you can not properly plan for the year ahead.
CPAs can help you put the right systems in place (more on that soon), and if they offer bookkeeping services, they can help you make sense of these outdated, unreconciled accounts.
5. A Reliable Accounting System is Desperately Needed
An accounting firm for small businesses should put the right systems in place to help make managing your books easier. We believe that technology is the answer for many small businesses to be more profitable and effective.
The right virtual CPA will help your business:
- Maintain accurate monthly books
- Create year-end financials
- Guide your business in the year ahead
Often, the same professionals that provide your CPA services can help you put accounting technology in place, too. Working with an accounting team to set up your accounting system will empower you to better manage your business’ financials while also freeing up time to focus on the tasks that matter most to your company’s success.
6. Cash Flow is Unpredictable
When money is flowing into the business, it’s easy to overlook just how much money is going out. Slow invoice payments or unnecessary overhead can quickly deplete your cash flow. Low liquidity may mean:
- Lack of cash to leverage growth opportunities
- Taking on debt to keep operations going
- Missing payments to vendors or employers
If cash flow is struggling, an accountant can help run cash flow statements and identify cash flow bottlenecks. A few issues that may cause cash flow concerns are slow-paying customers, rapid expansion efforts, and overhead that is not properly managed.
They can also help you understand which products or services are most profitable and the ones that are eating away at your profit margins. A lot goes into cash flow planning, and a CPA can help you successfully chart these waters.
Identifying these issues going into a new quarter allows them to be addressed so that you can remain financially stable in the coming quarter.
Wrapping Up
Virtual accounting is increasing in popularity as more business owners trust online services. When doing your own accounting is stifling growth, pulling key stakeholders away from key tasks or becoming too much to handle, it makes sense to offload this work to an accounting professional.
With Q4 taxes approaching, switching to a professional CPA can help you reduce your tax burden this quarter and go into the year on the right foot.
Click here to discuss our virtual CPA services in a meeting (online of course) with our team.
