6 Reasons Small Business Owners Need a Local Accounting Firm

Handling your business’s accounting was hard enough, even when it was a startup. As your small business grows, this job becomes trickier. Understanding complex tax laws, constantly updating business numbers, and preparing reports require time and expertise. That’s when outsourcing your accounting needs to a specialized accounting firm becomes a preferable solution.

But the real dilemma lies in choosing between a national accounting service and a local accounting firm. Which one works better for you? How do you decide? That needs understanding the difference in the approaches and skills of each and matching them to your requirements.

What do National Tax Services Offer?

National tax services are usually publicized as being simple, affordable, and convenient. These services aim to assist individuals in lower tax brackets and those whose finances are straightforward and trouble-free. Most of them use software-based processes for simple tax calculations, such as standard deductions or claiming CRA benefits. Such simple processes make national tax services affordable and cost-effective.

However, businesses need more than just standard deductions and easy calculations. They need customized accounting systems, long-term financial strategizing, and unique tax-saving ideas that are compliant – something that national tax accounting firms are not specialized in. Moreover, they lack the expertise to deal with potential audits or disputes with tax authorities.

What do Local Accounting Firms Offer?

Local accounting firms go beyond just helping with tax problems. They provide several services to a wide range of clients, from small businesses to local corporations. Local accounting firms employ Chartered Professional Accountants (CPAs) who are extensively trained in auditing, financial documentation, tax reporting, and tax and other financial advisory services. They are equipped to devise innovative strategies tailored to your specific business while staying tax-efficient and compliant with local and state laws. These strategies range from tax and investment planning to retirement and other financial planning required to help your small business grow.

In case you face a CRA audit or scrutiny, a CPA can not only advise but also represent you in front of the auditor.

Does Your Business Need a Local Accounting Firm?

As is clear from the differences mentioned above, a small business like yours would do better to outsource your accounting work to a local accounting firm. This is because while you might not have too much accounting work right now, you will most certainly need expert guidance and support to navigate the complexities of the industry and other markets as your business grows. CPAs can provide the financial support to ensure your business does not falter at the first hurdle it encounters on its growth journey.

Managing Several Financial Tasks

Local accounting firms efficiently handle accounting tasks, including payroll, maintaining up-to-date books of accounts, compiling financial reports, filing taxes, managing receipts and bills.

Adopting Technology

Given their extensive training and high certification standards, CPAs are well-informed and proficient in new-age technology, making accounting easier. From automating routine accounting tasks to improving data accuracy to securely encrypting and storing all your small business’s financial data in the cloud, technology can prove to be an extremely helpful tool. A local accounting firm can guide and assist you in setting up a system that best suits your business needs.

Managing Cash Flow

Local accounting firms set up digital systems to efficiently track and manage payments and cash flow. This regular monitoring and perusal of accounts receivable and payable identifies any loose ends or loopholes in business systems or cash flow. You can fix these issues before they cause any major damage. A well-managed cash flow system also helps make informed budgets and manage company finances, including investment opportunities and financial forecasts.

Specialization in Industry and Provincial Tax Laws

While national accounting firms are good at generalized tasks, a local accounting firm is more familiar with industry and state-specific norms. This awareness and experience can benefit your small business, as your CPA can provide deeper insights into how to up your game based on the current industry and market conditions. At the same time, they can leverage their local contacts to provide you with a far-reaching, growth-oriented platform.

Preparing Business and Financial Reports

National accounting firms typically have a limited scope of work, which usually does not include creating detailed reports or compiling financial data for specific target audiences, such as investors, shareholders, or board members. However, a local accounting firm does offer such services, including budget-to-actual cost comparisons and department-specific performance figures. They even offer auditing services, which can go a long way toward filling gaps or errors in your books of accounts and avoiding a potential CRA audit.

Ensuring Tax and Other Regulatory Compliance

Every business has to comply with laws and regulations, such as labour laws, tax laws, environmental regulations, and more. As your business grows into different provinces, these laws also change. Non-compliance can lead to serious penalties. Local accounting firms with in-depth knowledge of these various laws can ensure your business complies at every step and in every aspect.

While you might still feel your business is too small to hire such experts, the truth is that having an expert with you right from the beginning is far easier than hiring one later when the going gets tough. Streamlining operations and financial systems early can set the foundation for the more complex systems you will have to adopt as you grow.

Contact DNTW Toronto LLP in North York to Help You with Your Accounting Needs

Talk to a professional accountant to help you set up your bookkeeping and accounting process and give your business the professional edge. At DNTW Toronto LLP, our accountants and bookkeepers can provide services such as preparing financial statements and filing taxes. To learn more about how DNTW Toronto LLP can provide you with the best accounting and taxation expertise, reach out to us here.