Traditional vs. Modern CPA Services: How Advisory Services are Transforming Small Businesses
Traditional vs. Modern CPA Services: Which Should You Choose?
Traditional certified public accountant (CPA) services focus on accurate record keeping, complying with regulations, preparing financial accounts, auditing, and timely filing of tax returns. Historically, small businesses have been able to grow and thrive with only these services.
Over the years, accounting has evolved significantly thanks to technological advancement, changing business needs, and ever-evolving regulations. This brings one thing to perspective:
In this day and age, where businesses are under immense pressure to stay competitive and maintain a healthy cash flow, traditional CPA services can hardly keep up.
For small companies that want more insights into their finance to unleash their full potential in a competitive landscape, the days when CPAs were simply hired to act as bean counters, handle taxes, and prepare accounts are far gone.
That's where modern CPA firms come in to help keep up with the demands of today's business environment. They still take on traditional accounting tasks, but now offer strategic advice to small companies, giving business owners and CEOs more financial insights to make better decisions.
Take Dillon Business Advisors, for example. It's a modern CPA firm offering comprehensive financial services tailored to a business's needs. The goal is to provide the most value to achieve an owner’s financial goals—fast. Read on to discover the perks and downsides of traditional CPA services and how modern CPA firms are a game-changer for small businesses.
The Pros and Cons of Traditional CPA Services
Equipped with fundamental accounting principles and strong mathematical skills, traditional CPAs are gurus of bookkeeping. They help your business maintain accurate records to comply with regulations.
You want your taxes filed accurately and timely? They've got it. Traditional CPAs can help you stay on top of tax laws and regulations. In addition, their attention to detail makes them competent financial analysts that can read, analyze, and interpret data before compiling insightful reports for business owners and CEOs.
One problem, though: traditional CPA services are limited. They only handle basic accounting tasks, which are insufficient to promote business sustainability and multiply wealth. In today's competitive business landscape, you need a CPA that can deal with the basic stuff as well as provide forward-facing financial strategies that can make your revenue explode. Here's a deeper dive into the pros and cons of traditional CPA services:
Pros of Traditional CPA Services
- Comfort: With a conventional CPA, you delegate all your tax, auditing, and record-keeping tasks—they will do it for you neatly and accurately. By handling all your taxes, a traditional CPA frees up time you can use in other core business activities.
- In-depth knowledge: You also avoid legal issues because they have deep knowledge of relevant regulations to ensure you’re in compliance. Financial audits also provide insights to help improve your cash flow.
- Familiarity: You might see little reason to switch if your CPA has been filing your taxes for the last ten or fifteen years. You and the company likely get along well, and they are partially aware of your financial circumstances.
But as with anything in life, traditional CPAs have cons—big ones that can be very concerning for small businesses that want to grow and thrive.
Cons of Traditional CPA Services
As the name suggests, the services are traditional. As a result, they may not match requirements in the modern business landscape. This could mean using inefficient old technology and time-consuming processes that may cause slower turnaround times.
But that's just the tip of the iceberg. The biggest drawbacks of traditional CPA services are growth:
- Limited financial strategy expertise: Many CPAs look to the past, not to the future of your financial success.
- Current bookkeeping: Many CPAs often do not offer monthly bookkeeping and instead wait until the end of the year to “cleanup” accounting only for the purpose of preparing the tax return.
- Timely filing of tax returns: Traditional CPAs have many clients and many turn down new clients due to overloading of their team during tax season. This can result in extensions and increased fees for preparation.
- Thorough tax planning: With a high volume of clients and annual only engagements, many CPAs lack the time and business model to meet regularly with clients for proactive tax planning and implementation of tax savings strategies.
- Detailed financial reporting: With traditional CPAs only focusing on your taxes, there is a lack of awareness of your entire financial engine, limiting them the ability to give cash forecasts, budgeting, and cash flow reporting that you need to make real-time decisions.
This traditional service model is no longer sufficient for a CPA firm to provide the most value to your business…especially if you consider the stiff competition in most industries.
Your ideal provider should complement these services with result-oriented business advice stemming from strategic and critical thinking. That's why modern CPA services are currently on a dramatic rise.
The Rise of Modern CPA Firms
Traditional CPAs only focus on filing taxes, complying with laws and regulations, as well as financial reporting; however, small businesses can get so much additional value from CPAs. Modern firms are here to fill that value gap.
In addition to the tasks of traditional CPAs, modern firms are advisors to small businesses. They provide extra services such as business consulting, strategic planning, and deep financial analysis.
These valuable insights into your business's strengths, weaknesses, threats, and opportunities, allow you to make more informed decisions, easily identify growth opportunities, and improve your overall financial performance.
The strategic, proactive approach of modern CPA firms is the most critical to consider when shopping around for a CPA. It's the characteristic that sets traditional and modern CPAs apart.
Dillon Business Advisors: A Comprehensive Approach
Time is money, as most entrepreneurs would say. And you don't have to waste a second of it dealing with disorganized financials. Dillon Business Advisors, a modern CPA, can do the heavy lifting for you and provide the extra value you won't get from a traditional firm. Our services include:
- Business advisory that offers deeper insights and helps take your business to the next level
- Tax preparation and filing services that keep you on top of ever-changing laws
- Proactive financial management to fix issues before they wreak havoc in your business
- Payroll services that ensure employees are paid accurately and on time
- Automated bill pay services to save time and enhance efficiency
Our modern CPA services are tailored to your needs. After learning about your business through our business analysis, we identify gaps and recommend the best next steps to improve your financial health. To ensure our recommendations are tactically implemented, we give you access to a team of three financial experts to manage the execution.
Your Trusted Partner in Modern CPA Services
While mathematical skills and accounting principles are the foundation of CPA services, strategic and critical thinking are just as important. Traditional CPAs focus on the conventional accounting tasks, such as financial reporting, handling taxes, and auditing. They don't offer the juicy extras that can take your business to the next level.
Modern businesses should consider a modern CPA like Dillon Business Advisors that provides reliable business insights. Our value-added services can make your business resilient and thrive during challenging times.
Additional services such as business consulting, financial analysis, and strategic planning can reveal new opportunities to grow your business and skyrocket profits. Contact us today to learn how we can help take your business to the next level.
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