One aspect of running a small business that few people give a lot of thought to is the way they deal with professionals such as bankers, lawyers, CPAs/accountants and so on. Most entrepreneurs just dive right into their businesses without giving a second thought to what value these professionals can provide.
The main thing for an entrepreneur to remember is a personal relationship is needed with each of these professionals. They have the ability sometimes direct, sometimes indirect to drastically influence the success of your business. Your goal should be to develop a long-term, personal relationship with each of them. If you do that, when you hit a bump in the road, they’ll be there to help you get over it.
As you become more experienced, you’ll find that your accountant and attorney will overlap a bit in their services and expertise. Here are a few examples of services your CPA/accountant should be able to provide:
- Helping you decide what type of entity (such as S-Corporation or Limited Liability Company) and ownership structure to have when you first get started; your accountant should work closely with your attorney on this.
- Assistance in setting up your accounting system so that interim and year-end financial reporting will be easier.
- Help you understand your financial statements and use such financial statements to assist in making decisions concerning the direction of your business.
- Ensure that you pay the correct types of taxes in the correct amounts.
- Ensure that you send out W2 and 1099 forms to the proper people at the proper times, and also make sure that if you send out 1099s, the IRS will agree with you that those individuals are independent contractors and not employees. This is a common mistake that can cost you a lot of money and stress.
- Advise you on income tax deductions and how to separate your personal and business expenses.
- Advise and guide you through an IRS audit if you ever have one.
- Advise you on specific transactions, such as whether it’s better to lease or buy equipment or real estate.
Ketel Thorstenson, LLP has professionals with varying experience and expertise. By combining these resources into one firm, we have the ability to advise you on starting a new business or growing your business in any type. We have the research tools at our disposal to stay on top of the ever-changing tax and accounting regulations.
It is important to ask your CPA/s/accountant’s advice before you take action. It’s almost always easier (and cheaper) to structure things properly upfront, as opposed to trying to fix something later.
Ketel Thorstenson, LLP wants to build a relationship with you, help you succeed. We live our philosophy of Friends for Life.