Seed Stage
Ideas become businesses upon incorporation. Thus, choosing the right type of business entity for your situation is critical. It affects taxation, ownership, profit distributions, exit planning and more. CPAs can explain the benefits and drawbacks of each path.
A seed-stage CPA can also help acquire capital, obtain debt, and manage risk. Additionally, their expertise can help your attorneys draft articles of incorporation, operating agreements and bylaws.
Start-Ups
A firm’s early days can stretch the organization thin. Thankfully, CPAs can assist greatly.
Some ways could be supplementing an existing accounting staff, interacting with the board, or providing full support to a one- or two-person enterprise. CPAs will also improve the value by keeping good records on start-up firms.
Growth, Maturity
With mature companies, the role of CPAs can differ. There could be more board involvement. The accounting and reporting requirements may be greater. Financing arrangements could be more complex.
In short, a lot can change. CPAs can help design systems, processes and policies that serve changing needs.
For example, larger firms could require a different accounting system design. CPAs can help build a system that is auditable, reliable and includes strong internal controls, providing confidence to the business and its owners. Some other areas where CPAs can help mature firms:
- Financial reporting and audits
- Lease vs. buy considerations
- Financial representation to customers
- Industry certifications
- Executive compensation
- Benefit packages
With the greater needs of a mature firm, CPA guidance can make a big impact, especially if it’s part of a connected, comprehensive team of advisors addressing the entire business.
Mergers and Acquisitions
A sale is something owners usually only do once. Most owners have no prior experience and will never do it again. So, get help from people who’ve been there before.
Beyond helping sellers with the numbers, CPAs can also assist with the more important emotional pieces, including relinquishing control and deciding what’s next.
For buyers, risk is huge. CPAs help navigate it, while also providing valuation, opportunity analysis and due diligence support. This can be invaluable for clients with little bandwidth for such activities.
And of course, the tax implications of business transactions are enormous. This is the domain of the CPA. Their involvement is essential.
Exiting
Exit planning and leadership succession should be early considerations. There could be family dynamics, charitable considerations, legacy wishes and more in play.
CPAs can help sort through these issues. With a strong CPA/owner relationship, discussing these potentially sensitive topics is easier.
Tap CPA Expertise Early, Often
We are at our best when being proactive. Don’t be afraid to ask for help with any issue. We’ve even helped clients decide what color vehicles to buy!
While CPAs offer a lot, we don’t know everything. But, when we don’t know the answers, we invariably know someone who does.
