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Why Hiring a Licensed CPA in 2024 is Crucial for Your Business

Take it from a licensed CPA, there are plenty of honest tax preparers out there. However, many are not.

Below are just a few of the fraud-related news stories from recent years about unlicensed tax preparers committing fraud. From all over the country and all walks of life, these “tax preparers” knew what they were doing. Unfortunately, their clients did not.

If you need any more reason to hire a licensed CPA, consider this: when unlicensed preparers make mistakes, you are the one who will pay for it—in fines, back taxes, and possibly an audit. In most cases, they do not sign your tax return; you do. So, unfortunately, there is no recourse for you.

Avoid unscrupulous tax preparers who include errors or false information on a tax return that could leave you open to liability for unpaid taxes, penalties, and interest.

❗Tax Preparers Committed Fraud

“It’s not hard to fall for a fraudster when you’re looking to get your taxes done on the cheap,” says Chase Insogna, CPA and founder of Austin-based Insogna CPA. “Fraudsters say they are registered tax preparers, but the common person may not know the signs to look for.”

The Warning Signs

Here is a list of warning signs to help you spot a fraudster quickly:

⚠️ If you do not see a current registration certificate and proof of business license, walk away.
⚠️ Tax preparers should provide clear information about how much they will charge and provide a receipt.
⚠️ They should also provide you with a required written disclosure and contract.
⚠️ A ghost preparer is a person who prepares your taxes and doesn’t sign the form. This is against Nevada law and the IRS. A ghost preparer is likely unregistered and you won’t see them again. If they don’t sign the form, don’t pay.
⚠️ Claims they are endorsed by the IRS. The IRS does not endorse tax preparers.
⚠️ Doesn’t have a PTIN. Anyone who prepares federal tax returns for a fee is required by the IRS to have an individual Preparer Tax Identification Number (PTIN) and include it on federal returns.
⚠️ Paid tax preparers are required to sign your returns. Beware if they sign it “self-prepared” or use a business label.
⚠️ Beware of tax preparers who base their fee on a percentage of your refund or claim they can obtain larger refunds than competitors. The fee should be based on the complexity of your return, not your refund.
⚠️ Suggests you direct deposit your refund to an outside account

Need a reliable, licensed CPA to handle your taxes?

If you think you’ve been the victim of tax filing fraud, you can file a complaint here. Individuals, sole proprietors, and single-member LLCs can report a tax preparer’s misconduct using Form 14157 and Form 14157-A, which are tax preparer complaint forms.

Reach out to us today and let us safeguard your financial future. Our expertise ensures you stay on the right side of the law and get the most out of your returns. Let’s talk – because your peace of mind is worth it.

Why Switching to Cloud-Based Accounting Makes Good Business

❓ What is Cloud Accounting?

Cloud accounting software is similar to traditional, on-premises accounting software, but it is hosted on remote servers, similar to the SaaS (Software as a Service) business model.

💡 The Old Way

Right now, if you want to manage the financial side of your small business, you probably have to be in your office to do so. You have to be sitting in front of a very specific computer because that’s where you installed your accounting solution in the first place. If you’re at home and need to send an invoice or if you’re out in the field and just collected payment, you have to wait until you get back to the office to reconcile that information.

☁️ Cloud Accounting

With cloud accounting, however, the hardware no longer matters because your accounting software was never installed on it in the first place. It exists on a centralized server that is always connected to the Internet. Because of that, you can access that information from any device with a web connection – be it your laptop while you’re in an airport lounge, your mobile phone while you’re in a client’s office, or your tablet that you keep by your bedside at night. The choice is yours.

But in the end, it’s exactly that – a choice, and one that should not be made lightly. If you really want to know why you should migrate to cloud accounting, or even if you should do so at all, you’ll need to keep a few key things in mind.

❓Why Businesses Should Consider Cloud Accounting

Once you’ve learned as much as you can about what cloud accounting can do, it’s time to move into the realm of figuring out exactly what it can do for you. The question of whether or not this is the right move for you to take is ultimately one that you and you alone can make. By examining the subject from the perspective of both positives and negatives, you’ll be in a better position to make the right decision for your own goals at exactly the right time.

💡 The Advantages of Cloud Accounting for Most Businesses

For starters, the good.

The cloud is a major advantage to businesses that are just starting out, providing the flexibility to manage accounts from anywhere, anytime. All you need is a mobile device, an Internet connection, and the right piece of accounting software. You can manage the entire financial side of your business just as effectively while you’re stuck in traffic as you can behind your desk.

Cloud accounting is also great for collaboration. Multiple users can have access as needed from any location, and they can communicate and work together to stay on the same page in terms of financial activity. The same is true if you’re working with a dedicated accountant. The cloud can give them real-time visibility into your business for a level of insight they just wouldn’t have through other means.

Another major benefit of cloud accounting is that the types of software you’ll be using can typically be easily integrated with other aspects of your infrastructure. In the past, you were likely dealing with silos that hampered productivity. Now, with everything in the cloud, data can be shared freely and information is available in an instant – perfect for breaking down those silos once and for all.

🚩 The Disadvantages of Cloud Accounting

Now, none of this is to say that the cloud has NO disadvantages – far from it.

To begin with, the actual process of moving from your existing system into the cloud will hardly be as simple as flipping a light switch. If you’re staying with software from the same company, that’s one thing. If you’re not, you’ll need to prepare your data so that it can be seamlessly integrated into the new system. This won’t necessarily be the most challenging task you’ll ever face as an entrepreneur, but it certainly won’t happen overnight either.

You also have to think about whether or not you’re comfortable with the fact that you’re giving up a certain level of control over your data to a third party. All of your financial information will no longer be stored on a hard drive in your office – it will be on a server that could be halfway around the country (or the world). If your provider gets hacked, you get hacked. If your provider is disconnected, you’re disconnected. If your third-party vendor isn’t in compliance with any industry-specific regulations that you have to adhere to, guess what – neither are you.

All of these are challenges that can certainly be addressed, but they also represent a significant change from the way you’re probably used to doing things. Again, this is not a decision that anyone else but you can make. Most small business owners in particular will absolutely benefit from the advantages that cloud accounting brings with it… but some won’t.

Don’t look at cloud computing as a solution in search of a problem. You’ll know when it’s time to make the jump by recognizing a number of real problems that you’re facing that cloud accounting represents the perfect solution to.

✅ Best Practices for Migrating to Cloud Accounting

Once you have decided that the time is right to make the jump into the world of cloud accounting, there are a few key steps that you can start taking today to help make the process go as smoothly as possible.

✅ First, shop around.

Not all cloud accounting software is created equally. Make a list of all the things that you can’t do today that you want to be able to do in the cloud or all of the things that you CAN do today but that will hopefully be BETTER in the cloud, and keep that list handy while you search for a new solution. Once you’ve picked the right option, spend some time getting used to it before implementation. Watch online videos, consult with an accounting pro, ask questions, etc. Only once you’re certain that you know how to use your new cloud software properly should you proceed.

✅ Next, prepare your existing data,

the process of which will vary based on the aforementioned factors. If you do happen to be transitioning over to a brand-new piece of software, make a list of all the data that must make the transition so that you can keep things as organized and focused as possible.

Automate some of the process.

When it comes to entering data into your new system, you may be able to automate some, or even all, of the process, depending on the solutions you’re dealing with. This can definitely help speed the process along as much as possible. But a word to the wise – always be sure to back up all of your existing data in a secure, recoverable way BEFORE the process starts. If something goes wrong, if you make a mistake, or if a catastrophe happens, you want to be able to rest easy knowing that nothing has been lost.

✅ Continuous Improvement

Continue to look for opportunities for improvement on an ongoing basis. Once you’ve put a little distance between yourself and your implementation process, ask yourself questions like:

What went well? What didn’t go so well? Why did these things happen?
Which features am I actually using versus the ones that I thought I was going to use but didn’t? Why?
Where am I struggling?
In what ways did I make real, tangible gains in terms of efficiency? How do I push these even farther?
What do I like and dislike overall?

✅ Cloud accounting is not just a trend

The fact of the matter is that cloud computing certainly isn’t going away anytime soon. Forbes estimates that between 60 and 70% of all software, services, and technology will be primarily cloud-based by as soon as 2024.

✅ Begin the process to move your business to cloud accounting on your own terms

There will definitely come a day in the not-too-distant future when you’re going to have to make the jump into cloud computing whether you’re ready to do so or not. It is in your own best interest to begin that process as soon as you’re comfortable, so at the very least you can do so on your own terms.

Need help? 👋

Ready to make the leap to a cloud-based accounting system? We’re here to guide you through every step of the process. Let’s transform your accounting experience together – contact us today to get started!

What are the phases of an eCommerce Business? Stage 1: Profits Under $100,000 (Part 2)

Not sure if someone is a CPA? Just search your state board of public accountancy and look up the person’s name. Most people who call themselves “accountants” or “bookkeepers” aren’t licensed CPAs, which means you might not get the transparency and protections a CPA provides.

Having a knowledgeable CPA is just one part of the equation; the other part is ensuring your CPA understands eCommerce and its nuances. “Firms that can offer more than just compliance services will stand out as the industry evolves.” Your CPA should have the same priority as you: helping you reach your goals.

🚩 Getting Started

First on your list is to create a solid business plan. The U.S. Small Business Administration (SBA) agrees: “A good business plan guides you through each stage of starting and managing your business. You’ll use your business plan as a roadmap for how to structure, run, and grow your new business.”

Your business plan is also the first document you can show your CPA. A comprehensive business plan usually includes:

✅ Executive summary
✅ Company description
✅ Market analysis
✅ Organization and management
✅ Service or product line
✅ Funding requests
✅ Financial projections

But let’s be honest—how many people actually create these business plans before starting a business? In our experience, very few. The most important thing is keeping an updated cash-flow forecast.

While having a plan is a good idea, you don’t need all of this to get your first online sale. Sometimes, eCommerce businesses just happen. You buy some products, list them online, and—boom! You’re in business. Just don’t forget to hire a CPA.

Also, consider using third-party applications to manage your multiple online selling channels; this is an area where we can help you. Many eCommerce businesses move quickly through the growth phases, and you’ll want to be ready to succeed as your business expands.

Ready to take your eCommerce business to the next level?

Our team of eCommerce accountants is here to help. Let’s make your business thrive together. Contact us now and let’s start achieving your goals!

What are the phases of an eCommerce Business? Stage 1: Profits Under $100,000 (Part 1)

You’ve decided to take the leap and start an eCommerce business. Congrats!

Whether you’re just thinking about selling online, have started dipping your toes into online selling, or your business is taking off after your first “big” month with profits trending over $30,000 this year, this is the start of your hard work and investment into building your business to reach your goals. It’s time to nail down the big ideas, strategize over your growth targets, and develop a well-thought-out business plan. Clear out that storage shed or guest bedroom and begin accumulating stock. It’s time to take action so that you can live out your dream of building your own successful eCommerce business.

In the early days, you’ve likely done some homework and figured out what’s important: marketing your products, determining what capital to use to start, and getting those first sales in the door, especially during the fourth quarter. Achieving these three goals is crucial to kick-starting your success. You’re probably doing all your own sourcing, buying, pricing, and listing online, as well as managing fulfillment (or maybe utilizing a co-packer), customer service, inventory management, and sales taxes. And that’s before you even think about completing all the back-office tasks, such as accounting, inventory count, and minimizing your taxes.

✅ Accounting 101

Getting your accounting set up from the beginning is crucial for your eCommerce business. The more you delay this step into Phase 2 (or worse, Phase 3), the more mountainous the amount of work required to clean up this information—and the significant cleanup costs that come with it. Have you considered how you’ll provide your lender with financial statements if you’re seeking financing or a mortgage?

Accounting isn’t just syncing and categorizing your transactions. Are you properly recording gross revenues? Most merchants only sync net amounts to their books. If you value your time and would rather automate as much accounting work as possible, the costs easily outweigh focusing more of your attention on selling more products online. Maybe you manufacture or assemble your products. What about recording COGS from inventory to match your revenues? Or maybe you’re reselling products by arbitraging? With all the platform fees, do you have any easy way to determine true net profitability per product sold, with overhead included?

Then there’s your business structure to consider. Many start out as a DBA (Doing-Business-As) with their county registration. Just remember, this doesn’t protect your business name with your state, so if you’re building a brand or storefront name, someone could register it too and easily compete against you—or worse, legally claim your brand name. And if you’re selling on Amazon and/or other platforms, changing your business name and EIN# can potentially cause you to lose all your reviews, forcing you to start from scratch again from a marketing viewpoint. Setting up an LLC is beneficial in most cases when starting out. We can help advise on the best structure for tax strategy planning so you can maximize your tax savings with your eCommerce business.

💖 Client Testimonial

Insogna CPA has done our Amazon Business taxes for the last two years. They are the best accounting team that we have worked with to date and we plan to be long-term clients. Excellent staff who truly care about satisfaction and diligence. Great for all Amazon sellers.”
– Nick Ehle, Owner

You may be selling through eBay, the Amazon Marketplace, Etsy, and/or perhaps your own website. 🛍️🛒

Your customers have mostly stumbled upon you or found you through word-of-mouth, and you wish you could focus more of your time and efforts on marketing and growing, instead of worrying about educating yourself in legal and CPA stuff. Expertise is developed over many years in business. So, the value you pay to a professional will help you alleviate any unnecessary time figuring this out for yourself and hoping you made the right decisions. The potential of losing your customers is a real concern. We have seen this before, where someone quickly set up shop on a marketplace and did not think through the long-term consequences, such as their business evolves.

Choosing the right legal structure (LLC or Inc) is not only important for liability protection and taxes but is also very important to set up when initially creating your Amazon store online. To sell on Amazon, for example, you are best off having an Employer Identification Number (EIN) rather than using your Social Security Number as a DBA (doing-business-as) entity. Setting up your entity from the start is recommended because switching after you are already established on selling platforms can be very costly and time-consuming. These small details are exactly what an experienced CPA can help advise you with, and why many eCommerce business owners look to partner with a CPA early in their business growth.

Though you want a CPA who can deliver the best advice to your business, you’re also probably working with a limited budget and are interested in getting the most bang for your buck. That’s why it’s essential that you join forces with a licensed professional, like us, from the beginning to avoid costly ‘catch-up work’ in the future as you grow.

There is a host of what we like to refer to as “Craigslist bookkeepers” out there; people who advertise their services as though they are professionals but do not actually hold a license. They also cannot provide you with the state board protections that a licensed CPA can, the same protections that provide greater transparency and allow you to trust that your information will not just ‘disappear’ one day when you are not able to get a hold of your ‘Craigslist bookkeeper.’ If you decide to spend your hard-earned money on professional services, be certain that you’re getting the best professionally trusted advice and expertise.

Ready to take your eCommerce business to the next level?

Our team of accountants is here to help you every step of the way. Let’s chat and see how we can make your business thrive in 2024 and beyond.

What are the phases of an eCommerce Business? Stage 4: Profits $ 1 million+ (Part 2)

Expanding into the global marketplace? You’re not alone. Many eCommerce businesses are diving into omnichannel marketing, content personalization, and automation. “At this level, you need a combination of resources to run your business most effectively” (Scharf, 2018).

❓ Where do you go from here?

Outsourcing might be necessary for global expansion operations. A strong CPA team is essential to strategize the financial impacts of this growth. This is where a fractional CFO can make a significant difference.

Your accounting team is monitoring your numbers in real-time. Your virtual controller is helping forecast and plan, while your fractional CFO ensures every financial box is checked when expanding into omnichannel and international sales. “In the past, complicated taxes and high shipping costs made expanding sales overseas a major challenge for SMBs, but new technology has lowered the barriers for small businesses looking to take advantage of untapped markets” (D’Angelo, 2018).

💻 Technology at the Core

Technology will be central to your eCommerce business’s growth. From accounting to inventory to sales to taxes, you need a strategy to ensure all systems communicate efficiently, minimizing unnecessary human interaction. “The Shopify/ReCharge combination for subscription recurring billing comes to mind. These services work great together, but they become questionable as massive growth occurs. This is mainly due to the two components not being able to pass data back and forth in real-time, making manual data entry and reporting a bottleneck for scaling” (Hubbard, 2020). With massive growth, it’s crucial to reassess the technological foundation supporting your business processes and customer experiences.

Overhauling your technology systems and network processes might feel tedious, but it’s a worthwhile pursuit. Ensure your software offers the best consumer experience on the front end and accessible, collaborative back-end systems. Your business process commerce architecture will help your team communicate better, work more efficiently, and stay agile in meeting your business goals.

Refining your tech stack is an excellent way to increase performance and multiply profit margins. This allows your CPA team to perform more tasks through software automation, accessing real-time data to enhance operational capabilities and financial health. “Be diligent with these details because they are what can make or break you” (Thomason, 2020).

🏅 Outstanding Service, Knowledge, and Support

“Outstanding service, knowledge, and support. I highly recommend this firm for personal or business tax or financial assistance. A big benefit they offer over others is they run everything digitally, so there are no more physical papers to deal with – yeah!! Great job Insogna – hope I get more opportunities to work with you and recommend others do also.” – Jerome H., Client

To continue scaling your business, invest in researching new technologies to support your growth. “A focus on scalability means investing in the business’s overall commerce architecture, the ecosystem of software components that operate the business. This includes the e-commerce platform, CMS, ERP, CRM, OMS, PIM, marketing suites, analytics and reporting, etc.” (Hubbard, 2020). A valuable CPA team can advise on your tech stack, ensuring maximum technological efficiency. Streamlining at this level makes your life easier and can put your personal wealth on autopilot as you surpass your projected annual profits.

What’s Your Next Phase?

Depending on your goals, your Phase 4 will look different. Whether you aim to maintain your lifestyle, grow marginally each year, or accelerate into omnichannel eCommerce sales, an experienced CPA team is invaluable. They exist solely to help you achieve your goals.

Whichever phase your business is in today, don’t entrust your success to unlicensed bookkeepers. Get a CPA firm aligned with your vision that charges a fixed monthly price for all your needs and provides unlimited communication and access.

Get your eCommerce business on the right track. Contact us today and let our experts guide you to success.

What are the phases of an eCommerce Business? Stage 4: Profits $ 1 million+ (Part 1)

You’re not just running a business; you’re managing an enterprise. With multiple channels in play and a growing team, your processes must communicate seamlessly to drive strategic ecommerce decisions.

Does this sound like you?

👉 Your online business is booming.
👉 You’re expanding your HR needs with a growing staff.
👉 You’re seeking strategic advice to grow and retain your wealth.
👉 Your need for commercial space is increasing.
👉 You’re facing higher taxes and want strategies to minimize them.
👉 You’re contemplating expanding sales channels.

Your vision is vast, stretching towards new horizons. Yet, your workdays are long, and the pressure is mounting. Delegation feels challenging as you start hiring the right people for your thriving eCommerce company.

Your business has likely outgrown your home, and you’re eyeing more commercial space. While you’ve funded your growth so far, additional capital is essential to reach the next level. Your energy is high, but profits aren’t meeting your expectations—yet.

“An established business proves its survival in a competitive marketplace, but competition remains fierce as it evolves” (Hubbard, 2020). Now isn’t the time to rest. Continuous innovation, efficiency, and real-time financial forecasting are crucial. This is where a trusted advisory CPA can make a difference.

We advocate for an annual retirement contribution strategy, treating your business’s value as a bonus upon sale. Over the years, this approach builds significant savings and growing dividends, allowing you to retire on your terms—not just when you sell your business. – Chase Insogna, CEO of Insogna CPA

🛠️ Building a Successful Team

The first step to growth is people. The right hires are crucial as your 24-hour workday can only stretch so far. While working nonstop is possible for a while, burnout and health issues can arise. Today’s technology makes outsourcing easier than ever.

Hiring a CPA firm with expertise in accounting, payroll, virtual controller, fractional CFO, and tax strategy needs can be transformative.

An immediate benefit is having a full accounting department at your disposal. “For about the same price as hiring a bookkeeper, you can get an entire accounting department to support you” (Scharf, 2018).

💻 Embracing Omnichannel Marketing

Marketing today involves multiple devices and channels—social media, email, phone, and more. Omnichannel marketing integrates these interactions, delivering cohesive brand messages and reducing friction in the buying process. Companies with omnichannel strategies retain 89% of their customers, compared to 33% for those without (Bullock, 2020).

💡 Client Testimonial

I started with this team for my small business. They explained everything clearly and handled our personal taxes too. We’ve continued with them through many changes—closing my small business, job changes, hiring nannies, and moving across the country. Their pricing is straightforward, and they clearly know their stuff!” – Maggie J., Client

✅ Streamlining Your Accounting Needs

Instead of multiple outsourcers, a full accounting department ensures efficient, effective communication among key financial players. This synergy supports your business and personal goals, freeing you to focus on growing your eCommerce venture and enjoying life beyond work.

✍️ Planning for the Future

With your business established, you can now focus on personal wealth and retirement goals. Many business owners we meet lack a retirement plan beyond their business. This is misguided. Rarely does a business sale capture all the hard work invested.

Your accounting team can help you invest profits wisely. “Whether planning for a loan or monthly expenses, understanding cash flow is essential before making significant investments” (Odjick, 2020). Your CPA can provide insights into your current cash flow and how to stretch it to meet your goals.

Next Steps in Your eCommerce Journey

As you consider expanding to multiple selling platforms, omnichannel marketing becomes increasingly relevant. Leveraging various channels can enhance customer engagement and drive conversions.

Let our team of eCommerce accounting experts guide you through every stage of growth. Contact us today to discuss how our personalized strategies can help you achieve your business and financial goals. Whether you’re looking for business accountants, ecommerce accountants, or seller accountants, we’ve got you covered. Let’s build your future together.