The rise of automation has been a benefit to many businesses, especially SMBs. It has enabled them to reduce costs and streamline processes. At the same time, however, businesses should be aware that there is a risk in relying wholly on automation. Some jobs require human skill and judgment; accounting is one aspect of your business that will absolutely benefit from a licensed CPA’s skills. Have you ever thought about why your business needs more than automated bookkeeping?
Although accounting technology has increased automation in the industry by up to 75% in the recent past, artificial intelligence is not yet advanced enough to operate with the same level of accuracy that a human CPA does. Human interaction is invaluable to your business’s accounting.
Why Hire A CPA?
You won’t hire a CPA to do basic math; low-level tasks can be tackled by reliable accounting software. You will employ a CPA to provide meaningful insight into your company’s financials and to provide you confidential, proactive services that simply cannot be done by technology. This could include advice on ways to reduce costs and, in particular, to legally minimize your business’s taxes. It might also include suggestions on future financial strategy.
Qualified CPAs are well aware of their responsibility to keep your data safe as well as of their duty of confidentiality. This means that you can be reassured that any sensitive information will remain entirely private.
How to Get The Most from Your CPA
You will want to use a state board licensed CPA for most, if not all, of your accounting responsibilities. These include:
Reconciliation
Reconciliation involves comparing internal financial records with ones from external sources, like banks, credit card companies, etc. If all of the numbers have been recorded and managed correctly, the internal and external records should all add up. If they don’t, a CPA will look into the cause.
In some cases, discrepancies might be down to simple clerical errors, but reconciliation is a good way of detecting fraud and any other unusual financial behavior. A good reconciliation process also allows businesses to avoid overdraft fees and keep on top of improper spending before these issues get out of control and damage the company’s finances.
Although automation may be helpful in some areas, reconciliation really needs to be carried out by a board-certified CPA. There are some transactions, such as money in a petty cash box, which never enter the accounting system and errors in these areas can only be picked up and investigated by human intervention, not automation.
Financial Analysis
Financial analysis is the practice of assessing the current financial health of a business, looking at past performance, and considering future opportunities in order to make recommendations to improve a business’s financial situation. Without financial analysis, it is likely that you will keep making the same mistakes with your money that you have in the past.
Automation tools cannot be trusted to carry out financial analysis because it involves more than just crunching numbers. The best financial analysts are critical thinkers that come up with creative solutions to problems and develop complex strategies to overcome financial difficulty. That isn’t a skill that can be matched by a piece of software.
Wealth Building
Growing your business is always a risk, especially if you invest a significant amount of capital in your expansion. A certified CPA can help you to plan your business growth by making recommendations to ensure that you protect the financial health of the business. This includes advising on how best to use your financial resources, creating growth forecasts, updating procedures, and tracking real growth against projections.
Although a good understanding of numbers is important, it is innovation and creative thinking that help to push a business forward. The right CPA will have the experience and in-depth understanding of business issues necessary to drive growth. While automation tools can help with some of the more basic tasks where tracking growth and creating projections are concerned, they cannot create an overall strategy for business expansion that really works.
Minimizing Tax Liability
Minimizing tax liability is a priority for all businesses. There are often ways to find ways to save through deductions, tax credits, and organizing your finances in a way that legally reduces the amount you owe in taxes. Automation software is not capable of the clever planning and strategizing that is necessary to achieve this. If you leave your tax affairs in the hands of automation software, you will certainly end up paying more in tax than if you outsourced the responsibility to a licensed CPA.
Overseeing Automated Bookkeeping
It’s true that automation software can help with crunching the numbers and keeping things organized, but they cannot make ethical and logical decisions in the same way that a human can.
Automation is a tool that helps free CPAs from simple accounting tasks and allows them to reach their full potential in helping your company thrive. You will rely on a CPA to handle all of the big picture responsibilities and monitor automation tools to ensure that they are doing their job correctly, but you need more than automated bookkeeping.
Want to find out how automated bookkeeping and our team of certified CPAs can work together to support your business? Contact Insogna CPA today to learn more.