Three Reasons to Consult With a CPA Before Starting a New Business
If you are thinking about starting a new business from the ground up, you are not alone. Many people dream about being their own business and turning a great business idea into a lucrative, active company. However, before you start your business, it makes sense to consult with chartered accountants about your goal and objectives. Accountants are tax experts, and they also offer a full range of other services that can benefit your new business. Specialists at top accounting firms can assist you with a startup in these helpful ways.
Understand the Tax Consequences of Different Business Entities
One of the most important first steps you must take when establishing your company is to determine what type of entity you want to set up. You can choose between a corporation, an LLC, a partnership and more. Each type of business entity has different tax consequences associated with it as well as financial benefits and drawbacks. Your CPA can help you to better understand these differences so that you keep more of your profits in your pocket in the years to come while decreasing tax liability.
Create Your Financial Analysis
You can use the tax services of a certified professional accountant to assist you in the financial planning and analysis of your business. Your business plan will include detailed financial statements and analysis for your start-up. Your plan will be viewed by investors, banks when you apply for a loan and more as you seek financing, so you need the plan to be well-prepared and thorough. Professionally prepared statements are often viewed with higher regard and may be more accurate and complete.
Assist in the Separation of Business and Personal Finances
Separating your business and personal finances is often a challenge for new business owners, but it nonetheless is incredibly important. Your CPA can help you to understand the importance of separation of finances. He or she may also provide additional support and assistance in separating your finances by establishing different bank accounts and taking other important steps.
Starting your business can seem frustrating at times, and some of your frustration may stem from a lack of knowledge in business tax, business finance and other key areas. While you may not be an expert in this area, your CPA is thoroughly educated in business tax and finance. Your certified professional accountant is an excellent resource to rely on during the initial setup of your business, and you can continue to rely on your CPA in the months and years to come as you need even more significant financial services through the regular operations and hopeful growth of your business.