Everyone should sit down and consider whether they personally benefit from either having or not having an ongoing CPA relationship. I contracted a CPA seven years ago to handle my corporate filings and accounting. Aside from helping with compliance issues, he's been instrumental in helping me identify process failures and make accounting decisions. Having someone who spends all day every day looking at numbers brings a new view to the numbers that someone eyeball deep in running a business can't see without outside help.

Most people don't use their CPA correctly. They want him to file statutory paperwork with governments, and perhaps deliver a P&L (Profit and Loss statement) for corporate reporting. But, they seldom use a CPA or any other business consultant to identify flawed business practices. My CPA relationship helped me learn two powerhouse facts about business - immutable laws of business if you will - that many small business owners fail to apply. For example, he showed me that my failure to fire bad clients cost me tens of thousands a quarter. And, he showed me how I was paying to provide services to people who weren't going to pay. Sure, it sounds elementary. But, I was so concerned about losing customers and treating them with kid gloves that I allowed customers to ride my services without paying. Together, we hammered out a methodology without spending any additional money that saved me tens of thousands in expense and increased my profits dramatically.

Additionally, I learned that most people who own small businesses are failing to capitalize on the myriad of little tax gifts the ever changing code delivers to those who seek. For example, we talked about the single year expensing of IT infrastructure (very limited, but useful) and single year hundred thousand dollar SUV expense a business can take. Until last year, a business could spend up to an hundred grand on a utility vehicle and expense the whole thing. It's a great way to upgrade the executive's transportation with a useful tool of both business and comfort. Note: I didn't take this deduction personally.

John Canter has a great anecdotal story at Startup Journal expressing his story and advice on the subject of hiring a CPA. My story is a little more complicated, but it echoes the concept. A professional can bring information and attention to the process more efficiently than a small business owner can acquire the information alone. Moreover, it is a failure of focus for a small business owner to spend his time learning accounting and tax code when his attention is better spent working on his business. It's more profitable to pay a pro for the counseling and work when compared to the time it would take a well-intentioned but overworked business owner.

Posted in business jasonn's blog