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More than 300 new small businesses open their doors every business day in the United States.
Their ability to survive depends, in large part, on their ability to plan for the future, while
meeting the present challenges of today's ever-changing business environment. Certified public
accountants (CPAs) are the premier providers of business advice and technical assistance to
small businesses.
CPAs are professionals, distinguished from other accountants by stringent licensing
requirements. They must have a college degree or its equivalent, pass a rigorous national
examination, and meet certain experience requirements to qualify for a state license. Once
licensed, CPAs are governed by a strict code of professional ethics.
CPAs' technical knowledge, training, and business experience enable them to help small
business owners find solutions to their day-to-day problems. For example, CPAs provide
accounting and financial services on an ongoing basis, review and make recommendations to
improve internal accounting and administrative controls, help businesses secure loans, and
prepare cash flow projections that show how the loans will be repaid. CPAs also provide
advice to business owners on problems unique to the industries in which their businesses
operate and help them make informed decisions, such as creating succession plans to effect a
smooth transition to a new owner.
By providing accounting and auditing services, tax services, management consulting services,
and financial planning services, CPAs help small businesses prosper and face their competition
with confidence.
Accounting and auditing services
CPAs can assist small business owners by providing the following services in connection with
financial statements:
Performing an audit, a review or a compilation of financial statements
Performing an agreed-upon procedure engagement with respect to specified elements,
accounts, or items of a financial statement
Performing attestation services in conjunction with a forecast or projection
Developing formats for regular monthly or quarterly reporting
Analyzing operating results
Advising clients about the selection or use of computer software to generate financial
statements
Consulting services
Depending on the needs of the small business owner, CPAs can provide consulting services in:
Cash management
Risk management (insurance)
Financing
Environmental compliance
Business valuation
Compensation and benefit plans
Computer-based accounting systems
Succession planning for family-owned businesses
Mergers and acquisitions
Health care
Compliance with government regulations
Litigation support
Total Quality Management
Feasibility studies
Software evaluation and design
Disaster recovery planning
Organizational restructuring
Human resources planning
In addition, CPAs help small business owners monitor and reduce production costs, control
inventory, and develop marketing and pricing strategies. They also provide financial analyses,
including evaluation of economic projections and long-range planning objectives
Tax services
Ever since the first federal law on income taxes was passed in 1913, CPAs have been
extensively involved in tax matters. CPAs keep abreast of changes in the increasingly complex
tax system and can provide expert tax advice.
CPAs help small business owners with tax compliance, keep them aware of tax law changes,
and help them choose among the available options and provisions. They prepare business
income tax returns, as well as sales, payroll, and franchise tax returns. CPAs also represent
their small business clients before the IRS, if necessary.
Since most business decisions have tax ramifications, CPAs play an equally important role as
tax planners. In this capacity, CPAs advise small business owners on the tax implications of
proposed transactions and provide assistance in overall planning. CPAs help small business
owners understand how transfers of ownership, changes in inventory procedures, acquisitions
and mergers, and other transactions can affect their taxes. They also can answer day-to-day
questions about depreciation, contributions, installment sales, and other specific tax problems.
CPAs provide advice on the tax effects of various types of business organizations, including
sole proprietorships, partnerships, corporations, and limited-liability companies.
Personal financial planning
As personal financial planning advisors, CPAs help small business owners make the right
financial planning decisions by analyzing their overall financial and tax situations; helping them
devise estate plans and plans for retirement; and assisting them in risk management, insurance
planning, and developing an investment philosophy, among other things.
Adding value to the small business
CPAs make small businesses their business. They approach each set of business, tax, and
financial problems with objectivity. They work with small business owners to find solutions to
these problems and to ensure that companies are meeting their objectives. CPAs are prepared
to help the client recognize and deal with a variety of business situations.
Whether small businesses are just getting off the ground or have been established for some
time, CPAs can help put and keep them on the track to profitability.
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