There is one thing in business that is constant and remains the same: The need for proper bookkeeping and accounting.
According to Entrepreneur Magazine, 7 out of 10 businesses fail within 10 years due to their inability to control expenses.
You see, every dollar you make must be allocated somewhere.
Let’s be honest, in business, even if you don’t make a dime, there are expenses that must be paid.
So now more than ever, business owners who want to control their expenses, improve their financial health and make smarter financial decisions are turning to CPAs for help.
And a large portion of those businesses are opting for Virtual CPAs over local or even in-house CPAs.
Why go Virtual?
Why do you even need a CPA?
What should you look for in a Virtual CPA?
Let’s go ahead and answer those questions today! Let’s start with defining what a CPA is.
What is a CPA?
A CPA, which is a Certified Public Accountant, is an accounting professional that has satisfied rigorous education and experience requirements.
Like seriously, the CPA exam is known as one of the hardest professional exams in the world with a pass rate of 50% on average!
Not only that, CPAs have to maintain their license by completing hours of Continuing Professional Education on a continuous basis.
Because of their legal designation, CPAs are able to do more than a typical accountant and are highly sought after.
Now, why are businesses choosing to outsource their accounting needs to a virtual CPA instead of a traditional CPA?
Reasons Why Businesses Choose Virtual CPAs
Reason #1: Cost
You see, a full-time, in-house Certified Public Accountant will easily cost anywhere between $70,000 to well over six figures, not including benefits.
Not to mention businesses owner who decides to hire a Virtual CPA over an in-house CPA save on fringe benefit costs that come with an employee, such as:
- health insurance,
- paid time off,
- sick days,
- worker’s compensation,
…and a silicon valley favorite: ping pong tables.
As a result, businesses benefit from high-quality accounting, bookkeeping, and tax services at a much lower cost.
Reason #2: Larger pool of expertise
Businesses looking for a virtual CPA are no longer confined to a CPA that is located in their city or even state.
You can literally find and hire the best CPA in the country.
As a result, business owners can put expertise and reliability as the #1 criteria for choosing a virtual CPA instead of the location.
So now you understand why business owners are deciding to use virtual CPAs, let’s talk about why you even need a virtual CPA in the first place.
Why Does Your Business Need A Virtual CPA?
As mentioned earlier, 7 out of 10 businesses fail within 10 years due to their inability to control expenses.
In contrast, there’s a saying that goes… “behind every successful business, there’s a good accountant.”
You see, a good CPA or CPA firm can help you with the following things to make sure your business is in great financial health:
- Cash Flow & Expense Management
- Financial Monitoring
- Accounts Payable & Receivables
- Tax Prep
- Tax Planning
- Tax Audits
- Financial Tracking and auditing
- Budget Planning
- Budget Review
- Financial Assessment
- Investor Relations
- Financial Discrepancy Analysis
…and much more.
Long list, we know – but the best companies in the world from a financial perspective have an excellent understanding of all of the above.
And has someone, typically a CPA, who handles their accounting for them.
Think of your business like your body and your financials like your nutrition. If you neglect your body (your business) with bad nutrition (financial habits), you ultimately decrease your lifespan.
Now you can understand why the use of virtual CPAs are becoming increasingly popular as more businesses understand the need for excellent financial health.
So we’re getting somewhere here. Now, let’s discuss how you can choose the right virtual CPA for your business.
The best way to secure the services of a virtual CPA is to reach out to an accounting firm like LYFE Accounting.
Since there are hundreds of accounting firms operating in the US, it can be difficult to make a choice but here are the things to look out for:
How To Choose The Right Virtual CPA For Your Business
Because you will be depending on your virtual CPA to help improve different financial aspects of your business, you want to make sure they have strong credentials.
Some of the common credentials that you can look for are educational backgrounds, achievements, certifications, and past work experience.
Ask the virtual CPA in question to explain to you how they have helped other businesses increase revenue, lower expenses, save on taxes, or whatever your specific need is.
For example, here at LYFE Accounting,…
You can also measure a virtual CPA’s credibility by the way he or she suggests a key solution for your business.
Furthermore, check the reviews of the virtual CPA.
They or their company should have stellar reviews on Google or other review sites from other clients who have used them before.
As an example, here are a few reviews for Krystal, a CPA here at LYFE Accounting:
2. Breath of Knowledge
A knowledgeable virtual CPA can present many solutions to help improve your financial situation.
Even better, a knowledgeable virtual CPA can help perform many different accounting services for you which consolidates your needs to one CPA or CPA firm and saves you from needing multiple CPAs.
Remember the list from above where we explained all of the ways a virtual CPA can make sure your business is in great financial health?
Cross-reference that list with your CPA prospects to make sure they have the knowledge or experience to handle your situation.
Undeniably, integrity is one of the hardest traits to measure. At first glance, there’s no accurate way to determine if a virtual CPA firm has a deep sense of integrity.
But, if the CPA is willing to throw moral principles out the window to attain a certain goal, then that’s a red flag.
You’d be better off looking for another virtual CPA.
Once you’ve started working with a CPA, you will be able to observe his/her operational methods on a daily basis. Then, you will be able to determine the firm’s level of integrity.
So let’s recap what we went over today:
- First, we learned that the biggest reasons why the use of virtual CPAs are increasing in popularity is due to virtual CPAs being cheaper to hire than an in-house employee and that virtual CPAs give businesses a larger pool of expertise to choose from that is not confined by location.
- Second, we learned that businesses need a virtual CPA to help them maintain or improve their financial health and practices such as financial tracking and auditing, tax prep, bookkeeping, and much more.
- Lastly, we learned that when hiring a virtual CPA you should make your choice based on credibility, breadth of knowledge, and integrity.
And that’s it! If you’ve decided to work with a virtual CPA today, don’t hesitate to contact us. We would love to hear from you!