You're probably familiar with the old saying that "a penny saved is a penny earned." Well, there's a whole lot more to it than that.
If you're looking for a way to make your money work for you, read on. It's a guide to all things related to CPA, so whether you're thinking about going into it or have already decided to do it, we will tell you something you may not know about the industry.
An experienced and knowledgeable CPA designated accountant will know what they are doing, but they will also help any business grow like crazy.
I bet you didn't know there were so many things CPAs can do to help any business grow, did you? Well, there are. Most CPAs use more "little-known" tricks every day to help their clients succeed. It's no wonder, so many of them have become multi-millionaires by the time they're 40! (Some of them even earlier.) Some people say a CPA-designated accountant makes a lot of money because they get to count it. But that isn't true. Yes, they get to keep a certain percentage for themselves—but the main reason some accountants make money is that they get to help their clients make it. Here are proven ways many accountants helped their clients to make their business perform more successfully.
Most people who own a small business (or even a medium-sized one) aren't interested in CPA tips. They're interested in growth. So, we like to share some simple secrets with accountants to help grow their clients' businesses. Successful CPAs and accountants use these tactics. And, you'll learn how to use these very same tactics in your own business to achieve the same results. There's no magic here. But, when put into practice, these tactics will dramatically increase your bottom-line profits.
The Power of Intangibles
What are intangibles? These are non-monetary assets that give an edge over other business owners. Examples of intangibles include relationships, reputation, and credibility. The idea is to have some intangible value that can persuade people. In other words, if you want to sell a product or service, what does it offer that can be seen and touched, felt, smelled, and heard? Conversely, how do you sell the intangible benefits of a product or service that customers can't see, feel, smell, or hear?
A business brand, public perception of their personality, and professionalism make them the person they are. These intangibles are critical factors for finding jobs, getting promoted, excelling in business development and getting more clients. Weak intangibles will hinder the chance of landing a job or promotion as personality and professionalism come across as lacking. A professional brand is a crucial part of any business. Look deeply into these to help them.
Why Your Customers Don't Always Buy in your suggest? But They Do Sometimes
A tax preparer is just a person who prepares taxes, but a Chartered Professional Accountant (CPA) can provide more advanced financial services. Therefore, it's usually in the best interest of a customer to utilize the services of a CPA, make them count. Position yourself as a far better partner than tax accountants, and convincing your skill is the key.
How to Be Persuasive When You're Not Being Threatening
Every business should up-sell their service. However, most professional accountants will be put off when their clients start asking, "How much?" or "What are your requirements?" To make sure you're getting what you want, you have to be able to show you've considered all the possible outcomes and how each will affect a business's bottom line. To be persuasive and to convince your clients that you're the right choice for them, you need to be able to answer these questions. Your client will appreciate the knowledge you provide them as a professional.
Advise client on How to Collect On Past Purchases
So how can you get past the fact that the average person would be like, "Gee, I already paid for that," when trying to collect on past purchases? How do you overcome the fact that they don't remember that they've paid for it? This strategy is another way to use your standard accounting knowledge to your advantage.
If you are familiar with accounting and know-how to collect on past purchases, then why not use this knowledge to your advantage? With some small investment in time, you could make a killing and save a lot of money for your client if you know what to do.
Help client to Prepare All Paperwork For Tax Audits.
So what exactly can CPAs do to help their clients prepare for tax time? First, gather all of their financial documents. Then, have them neatly organized and in chronological order. You can also make use of cloud-based filing and organizing solutions, such as the free Online Invoice App (formerly known as "TurboTax Online") and TurboTax Mobile. Consider running a webinar to advise and provide value-added to your client and help them review any issues.
Tax software/applications will make it easier to file and organize tax returns anywhere. Any business will want to keep their accounting records up to date if the Canada Revenue Agency (CRA) wants them for tax purposes.
Critical "Backend" Skills Every Entrepreneur Must Master
A recent survey conducted by Intuit of 1,000 small business owners found that nearly three-quarters (74%) of the respondents didn't know how to manage their books and finances properly. Most small businesses are under-capitalized, and they need to know the most basic accounting functions to grow and work their business correctly.
Let the customer know that by utilizing a CPA as an expert in the area, passing on accounting knowledge to the client is invaluable. Entrepreneurs appreciate the skills passed on to them, and their business will grow fast.
How could CPA accountants get sued by their clients?
It is tricky because there is no logical reason why a CPA should be sued. After all, CPAs are not lawyers and are not subject to the same laws that apply to attorneys. However, it does happen from time to time. The consequences can be disastrous for the professional responsibilities and their practice when it does. So what's the first step in avoiding this scenario?
How would insurance protect the CPA business?
Simply put, it's education: every CPA must take a few ethics classes. The way it works is, whenever there's a lawsuit involving an accounting professional and their client, the plaintiff's lawyer will demand to speak with the defendant's CPA. At that point, the CPA will explain in detail why they did, what they did, and why it was legal as an accountant. It will, of course, appease the lawyer and hopefully result in a settlement without the need for a trial.
Here is a hypothetical example that illustrates the point. Suppose an accounting firm prepares a tax return for a client and fails to give the client some written opinion on whether the CPA adequately prepared their tax return. Should CRA audited the tax return and found several substantial errors, the client filed a lawsuit against the accounting firm for not adequately advising them in the capacity as their managing accountant. A situation like such is difficult, and the firm might reasonably fear every error on the tax return they missed, and the potential of liability could very well exceed millions.
Will any insurance sufficient for the firm?
One of the biggest arguments I hear about group programs is that they are cheaper and enough for every accountant. Unfortunately, group members and individual policies aren't as drastic as many think. The average cost per person in a group plan comparing each feature side by side may usually be higher than what you'd pay for a single plan due to a risk pool of a similar nature. Having the prestigious rights to join a certain group due to certification or career experience may not necessarily reduce the pooled risk and lower the insurance premium.
When it comes to business insurance for an accounting firm, you're going to find two significant types: property and liability. You'll also find that there are different types of businesses, which can get confusing when trying to understand the differences in coverage. Here's a breakdown of some of the most common business insurances. Know what to expect on your insurance coverage for an accountant firm:
Comparing the features of your policy, you should expect the package of
- Errors & Omissions
- Commercial General Liability including Employee Benefits
- Office Property Package
- Cyber insurance covering ransomware extorsion and data breach
Check your policy to ensure they meet or have the following feature as they are important
1- First dollar defense, (deductible does not apply to defense costs for E&O)
2- Limits can be up to $5,000,000 E&O and $5,000,000 CGL
3- E&O coverage is Costs in Addition basis and should at least includes:
- Trust Fund Management $25,000 Sublimit
- Civil Penalty Coverage $100,000 per claim
- Directors & Officers Liability – Outside Non Profit included
- Automatic 60 day extended E&O reporting period
- Disciplinary Proceedings Reimbursement - $15,000 Sublimit
- Loss of Documents - $25,000 Sublimit
- Libel, Slander or Defamation - $50,000 Sublimit
- Privacy Failure Expense - $25,000 Sublimit
- Occupational Health & Safety - $15,000 Sublimit
Our rate starts from $650 for E&O and $400 for CGL for the lower range package. The rate is indeed one of the best in the industry.
Should a CPA firm get any cyber insurance?
Some CPAs and even their clients believe that because they are a CPA business and do not offer anything on the internet (or social media), they are not at risk of a data breach. However, with technology advancing rapidly, any business or CPA needs to be prepared for potential threats.
An email address can be used to log into a website. For example, if the website's password is stolen and the email address associated with the password is used for logging in to the website, the hacker can access the site and all the information stored.
When a cyber-attack is launched against a company, it's not just a matter of whether or not you can trace the source of the attack, but also whether or not your company will be able to withstand the potential damages of such an event. Unfortunately, a common mistake for businesses without an IT team is to assume that they are safe from cyber-attacks. And when cyber attacks do happen, the company may not have sufficient resources to recover from the damage done.
So, the hard answer is, I believe ALL CPA firms need cyber insurance.
An accountant's goal is not simply to be accurate in their numbers. It is to provide a service that helps solve real problems for clients. It includes assisting them with keeping good books, calculating taxes, providing financial reports, and even creating financial models. To do this, you need to be good at more than just math and figures. You need to understand your clients and their businesses. You must be able to communicate with them effectively, and you must be a problem solver, willing to think outside of the box when your client needs it. If you can do all of these things, your clients will be more likely to recommend you and continue to use your services in the future. Finally, having group professional liability insurance may not be the cheapest option as there are more options in the market with lower, better coverage if you start comparing.