Summary:
● CPAs provide financial support beyond tax preparation, for businesses and individuals/families
● Your CPA can collaborate with your Financial Planner for wrap-around strategy
● If your finances are complicated, you’re navigating a big life transition, or if you’re overwhelmed by taxes you may consider hiring a CPA.
What is a CPA?
Certified Public Accountants (CPAs) are licensed professionals who are highly trained in accounting, auditing, and tax law. They can play a pivotal role in guiding individuals and businesses through the complex landscape of financial management.
To maximize the benefits of this professional relationship, it's helpful to understand the core services a CPA provides, how your CPA can collaborate with your financial advisor, and when it may be time to reevaluate your current CPA partnership.
Services that CPAs Provide
CPAs can do far more than prepare and file tax returns.
Certified Public Accountants offer valuable expertise and strategic financial management services tailored to your unique needs and goals. Whether you’re a business owner trying to maximize deductions, an investor navigating capital gains, or an individual planning for the future, a qualified CPA can help your financial decisions align with tax laws and your long-term goals.
● Tax Planning & Compliance –CPAs develop year-round strategies for businesses and individuals to help reduce tax liability and avoid costly mistakes with the IRS.
● Financial Reporting – Whether for business or personal finances, CPAs can prepare financial statements that offer a clear picture of financial health.
● Business Consulting – From structuring a new business to advising on mergers, acquisitions, and cash flow management, CPAs can provide insights to optimize profitability for businesses at all stages.
● Wealth Preservation – CPAs can help individuals strategize around investments, estate planning, and charitable giving to protect and potentially grow wealth.
Collaboration with your Financial Planner
While financial planners focus on wealth accumulation, wealth preservation, and investment strategies, CPAs work to ensure that financial decisions align with tax regulations, compliance, and long-term financial efficiency.
A well-coordinated approach between your CPA and financial advisor can be extremely beneficial in a number of ways.
● Optimized Tax Strategies – A CPA can help structure investments to seek to minimize tax liability, ensuring that clients retain more of their earnings.
● Holistic Financial Planning – While a financial advisor develops strategies for growth, a CPA works to ensure these align with tax laws and accounting principles.
● Risk Management – CPAs analyze financial statements and cash flow to help clients make informed, tax-efficient investment decisions with their financial advisors.
Together, CPAs and financial advisors can provide a comprehensive financial roadmap that aims to grow a clientʼs wealth while preserving it from unnecessary tax burdens and compliance risks. Their collaboration can create a balanced financial strategy that provides short- and long-term benefits.
Choosing a CPA? Check the Calendar.
When it comes to selecting a new CPA, timing matters. After tax season closes (April-June) is an ideal time to engage with a new CPA: they generally have more time and availability to onboard new clients.
Year-end (October-December) is also a smart time, allowing you to prepare for the next tax season with a fresh approach. Avoid switching to a new CPA during peak tax season (January-April) unless it is necessary.
Several other factors may indicate that you need a CPA, regardless of the calendar. If your taxes are becoming more complex, your business is growing, or you’re struggling to keep up with financial reporting, a CPA can provide valuable guidance.
Signs that You’re Ready for a CPA:
● More Complicated Finances – Individuals with multiple income streams or investments and business owners often require professional tax and accounting services.
● Major Life Changes – Marriage, divorce, inheritance, or retirement can all introduce new financial complexities that would benefit from an experienced CPA.
● Tax Filing Stress – If DIY tax prep is costing you too much time and unnecessary stress – or your taxes have become too complex for free, simple filing software – a CPA can streamline the process and potentially maximize deductions.
Conclusion
By understanding the role of your CPA, encouraging collaboration with financial advisors, and recognizing when to reassess the relationship, you can ensure that your finances are managed effectively. Regularly evaluating your CPA relationship and making changes when necessary can contribute to both short and long-term financial success.
To maximize the benefits of working with a CPA, follow these guidelines:
● Proactive Communication – Regularly update your CPA on significant changes to your finances or goals. Staying proactive helps them to provide timely advice.
● Stay Organized – Keep your financial records well-organized and accessible.
● Set Expectations – Discuss the scope of services, fees, and timelines. Setting expectations early can prevent misunderstandings and maintain a smooth relationship.
● Seek Advice – A CPA should not only respond to your queries but also anticipate potential financial challenges and opportunities, offering proactive solutions.
If you think it may be time to consult with a Certified Public Accountant – or want more information about the services we provide – please reach out to us at any time.
Important Disclosures:
This article was created for educational and informational purposes only and is not intended as tax, legal or investment advice. If you are seeking investment advice specific to your needs, such advice services must be obtained on your own separate from this educational material.
West Invest, LLC and LPL Financial does not offer tax advice or tax preparation services.