The year 2020 brought unprecedented challenges for businesses. From small to mid-sized businesses and large enterprises, business owners across all industries have had to figure out how to keep their doors open, comply with new restrictions and regulations, and adapt to an abruptly changing cash flow. Here at Sovereign CPA, we can help your business sort out the chaos, all while setting yourself up for a successful incoming year.
The business landscape has changed, and it’s likely that your business had to make some changes to its internal structure, finances, budgeting, etc. We are here for small businesses as they navigate these uncertain waters. Our financial advisory services can also help in looking at the bigger picture and see what might be possible.
How Have CPAs Been Involved in Helping Small Businesses?
Across the country, certified public accountants have been working in the corners of small businesses as they fight for survival. The economic chokehold has come much harder to certain types of businesses like restaurants, breweries, and others in the entertainment industries.
In Alabama before November 5th, for example, restaurants could only operate indoor dining at 50%. That expired December 11th and then changed again, adding more capacity but keeping restrictions. The past few months have led to the closing of well-beloved Alabama businesses. Every state has seen different challenges, as they have each handled the pandemic differently, but needless to say, certain businesses have had to deal with a policy rollercoaster.
For people in the restaurant industry, there are still a lot of questions for the upcoming year. They continue to struggle despite increased capacities and, in some cases, back to full capacity but limited hours. There have also been other restrictions and requirements—like adding plexiglass where people can’t be 6 feet apart—that have pushed businesses to make infrastructure investments that may be moot three months from now.
For business owners, the largest source of stress is the uncertainty and the unknown; they don’t know which restrictions will stay, which will be lifted, or which will change. There is also a lot to be seen about what the market looks like as things begin opening up. CPAs have played a role in helping businesses sort out their finances and helping with planning and taking advantage of state and federal funds that are meant to help small businesses.
Key Considerations and Functions a CPA Will Help Your Business With
Cash flow is on top of the worry list for many businesses. One way to work through it is to have the right data and assess what you have before you start panicking. It’s possible to get creative when it comes to moving around numbers and making ends meet. One way to do that in times of crisis is by collecting the right data and then assessing what cuts can be done to maintain some revenue.
Other headaches might come as tax season rolls around. The tax code is confusing enough. So here are a few things to keep in mind as your business moves forward:
- Depreciation Purchases: These are expenditures or leases used to run your business. This can include material or equipment such as copy machines, desks, computers, etc. Many items will be deductible.
- Keep Income and Tax Deposits to Date: This relates to your deposits throughout the year and depending on where your business falls in revenue.
- Goals for Retirement Plan Contributions: Consider a cash balance for you and your employees.
Other ways that a good CPA does the heavy lifting include:
- Having a standard chart of accounts that keep your company’s books in order is key is an important function a good CPA can do. It’s the ultimate filing system for your company’s expenses and ensures complete accuracy and good data.
- Evaluating cash-in and cash-out means keeping track of incoming and outgoing expenses. You want to know where every dollar is going and constantly assess whether your cash is moving effectively and efficiently. This is key to keeping you on track to accomplish your goals. In times like this, it can help you budget and track until the economy and restrictions return to normal.
- Keeping track of your tax financials each month. A CPA can help you know where you stand on taxable income for the year. It’s a good way to find ways to save money throughout the year. Staying on top of changes to tax law, retirement benefits, and other changes that impact your bill can become a real headache.
Find a CPA that Understands Your Business
Every business is different and therefore operates a little differently depending on their internal structure, number of employees, goals, etc. For many businesses, the biggest stressor is simply the unknown. If you’re a small business looking for some guidance, connect with a trusted certified public accountant at Sovereign CPA, today.