There are several things to consider, such as choosing the kind of company you want to operate, managing legal documents, and attracting clients. Making choices regarding where to locate your company in Houston, how to set it up, and how to raise money will be necessary. You may successfully realize your company concept by doing things one step at a time.
Creating a solid accounting plan for the essential facets of your company is crucial if you’re an owner. Ensuring that your procedure and checks are in place, adhering to state and federal standards, and aligning your entire accounting strategy with significant business activities are all crucial.
Accounting Strategy: To support a corporate objective, an accounting strategy consists of a financial plan, strategy, and action items. It’s a method of looking at financial information and handling record-keeping. Even though you can be using many accounting techniques at once, each one will help you achieve a certain corporate objective.
Key Financial Services Offered by a Houston CPA Firm
The monotonous accounting that formerly defined the job of CPA companies has evolved in modern times. Basic accounting is now doable by non-accountants thanks to programs like QuickBooks and Intuit. But “accounting is the analysis,” as Universal Accounting Center’s Roger Knecht clarifies in a Modern CPA Success Show interview. And analysis is what forces entrepreneurs to make wise choices.
Knecht delineates the three fundamental services provided by contemporary accounting companies.
1) Bookkeeping and Accounting
2) Tax Planning and Preparation
3) Advisory and CFO Services
Knecht refers to these fundamental offerings as a “ladder.” Thorough accounting serves as the basis for more advanced work and guarantees adherence to Generally Accepted Accounting Principles (GAAP). The capacity of the bookkeeper to compile precise data and convey it in an understandable manner is essential for tax preparation. The tax accountant then uses their knowledge to build upon this base by promptly submitting the tax returns and providing tax planning services that teach customers how to lawfully reduce their tax obligations in future years.
Anyone may prepare taxes for customers by registering for a $15 PTIN, but only Enrolled Agents and CPAs are authorized to represent clients before the IRS in the case of an audit or disagreement.
To provide guidance on topics like cash flow, vendor and investor relations, and long-term strategy, a CFO or advisor often integrates the work of the tax accountant and bookkeeper. Knecht observes, “Unless you’ve actually become very familiar with the company’s accounting process, from bookkeeping through the tax, I don’t think you can do advisory.”
Internal accountants may handle some of these tasks if the customer is capable of doing so. One individual may handle both bookkeeping and taxation for a small firm. Businesses’ finances become increasingly complex as they expand. One individual can’t take care of everything for very long. At the top end, a large company is probably going to have a complete staff of internal accountants, each with a distinct area of expertise.
Accountants that are contracted out might supplement internal staff members. A bigger organization could need a CPA firm to manage its internal workforce, while a small business or entrepreneur might employ a Houston CPA firm for accounting services or tax preparation. Houston CPA companies are able to operate together by providing consulting services that enhance the job completed by staff members.
How a Houston CPA Firm Helps with Business Growth
Except for their accountant, company owners are the only ones who really understand their industry! Whether they work for an outside firm or an internal one, your accountant is well-versed in the financial aspects of your company. Although you are aware of your company’s skill in relation to the special products or services you provide to your clients, the success of your business also depends on the caliber of your accountant. But their job doesn’t happen in a vacuum. It necessitates constant communication between your accountant and yourself as the company owner.
Here are five methods that you, as the company owner, may assist your CPA firm in helping you expand your business.
1. Maintain Consistency
It is advisable to maintain consistency in your business dealings whenever it is feasible.
2. Have Accurate Information
Ensure that personal and company costs are kept separate. It really muddies the waters when business owners utilize company accounts to pay for personal costs.
3. Show Involvement
Make more business contacts by using your accounting or CPA Company as a resource. The additional companies you need to help your company stay profitable may and should be recommended by your CPA.
4. Be Available and Responsive
You are a busy company owner, and your CPA or accountant is aware of this. But sometimes, they need prompt responses and/or guidance from you.
5. Set reasonable expectations for yourself.
Your accounting/CPA business should assist you with the aforementioned matters, but their main responsibilities still revolve on bookkeeping, reconciliations, tax planning, tax preparation, and other related tasks.
Case Studies of Profitable Houston Enterprises
1. Tech Pioneers: Increasing Financial Openness with CPA Knowledge
An IT business in Houston collaborated with a nearby CPA firm to optimize its financial reporting procedure. The firm increased investor transparency by putting stronger accounting procedures in place, which helped it to eventually raise $10 million in venture capital investment. The Houston CPA firm provides audit services and assisted with tax planning, which resulted in a 15% tax savings annually.
2. Restaurant Chain: Boosting Profit Margins through Cost Control
A fast-growing restaurant chain in Houston enlisted the services of a CPA firm to identify inefficiencies in its cost structure. By analyzing inventory management and labor costs, the firm helped reduce waste and improve employee scheduling. This partnership led to a 10% improvement in profit margins, positioning the restaurant for further expansion.
3. Manufacturing Giant: Navigating Tax Regulations for Expansion
A Houston manufacturing company sought a CPA firm’s expertise to assist with complex tax regulations as it expanded into new markets. The firm helped the company take advantage of state and federal tax credits, which reduced their tax liability by 20%. Additionally, the CPA firm ensured compliance with regulatory standards, preventing costly penalties.
4. Retailer: Financial Strategy for Growth
A regional retail chain in Houston worked closely with a CPA firm to develop a strategic financial plan for expanding its online presence. The CPA firm provided forecasting models and cash flow analysis, enabling the retailer to make data-driven decisions. As a result, the business doubled its online revenue within a year and secured additional financing to open two new physical locations.
Conclusion
High-level consultants who may operate as a Virtual CFO by evaluating financial accounts to determine which expenses are yielding the highest return on investment or where hidden costs are affecting revenue are available from full-service CPA firms. By focusing on the key performance indicators or measures that generate sales, a skilled CFO may increase cash flow.
The act of assigning a monetary value to an asset is known as valuation, and it is one of the services provided by CPA companies. That asset might be a company or an item, such as real estate. Planning an estate, creating stock options, or considering a merger or acquisition all need valuation.
There are instances when an independent CPA firm’s services—audits being among them—can only be completed by outside parties. Obtaining external audits on a yearly or semi-annual basis is mandatory for several organizations, including government agencies, financial institutions, and publicly listed enterprises.
