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Developing financial independence is a major step in crisis preparedness. A report by the Harvard Business Review talks about businesses with less than 500 employees accounting for 48% of American jobs and 43.5% of the GDP. Yet, these are businesses with limited cash resources to buffer even minor financial shock. Businesses have closed temporarily in the time of the coronavirus and many face the prospect of never reopening. The report revealed how a majority of the businesses surveyed had less than two months of cash available to deal with shortfalls.
Sound finances are thus identified as an important requirement for businesses to deal with and recover from a crisis. We’ve outlined two steps that can be taken to help CPA business operations deal with a crisis more effectively. Both of these steps involve partnering with professionals and can help CPA practices develop capabilities that not only help outlast a crisis, but also emerge stronger.
1. Building a pipeline; pursuing business building stringently
Business building is one of the mainstays of a startup or small sized CPA practice. In the pursuit of recovery and rebuilding, business building activities often get sidelined, affecting income channels as well. Key resources are either busy attending to client requirements or spending time putting the firm’s operations, including key non-core activities, in order. This leaves little time for the number one priority for a business during an unforeseen crisis: building a pipeline of paying business or a directory of clients with paid work.
Fortunately, partnering with an efficient outsourcing services provider can help in this scenario. Partnerships allow the firm to access proven infrastructure and expertise. Partners can work as an extension to a CPA practice’s own resources, responsible for client deliverables. This leaves the business owner time needed to pursue new client development and open up potential income-generating avenues for the firm. Given these strengths, partnerships can free up small business owners to pursue critical new business as well as build up resilience capabilities needed to outlast a crisis. Further, the high caliber work generated by a partner can boost operations for startups, small businesses, and independent CPAs, helping develop capabilities and resilience needed to survive through a crisis, should one occur.
2. Access professional financial planning
Ensuring a steady, paying clientele can help build a CPA business. However, income must be matched by diligent accounting and financial management to ensure a well-managed cash flow. While CPA firms possess the expertise and diligence to ensure a stellar job for their clients, their own financial management may remain vulnerable to neglect because of lack of time and resources.
CPA help from a CPA partnership is a reliable way of accessing dependable financial management expertise. For CPA practices, this can be an efficient way to ensure their own accounting is accurate and complete, while benefiting financially from professionally managed finances and bookkeeping, debt-free accounts, and more. A partnership provides access to a thorough understanding of business structures, including tax obligations, tax credits, holidays, and applicable deductions. For a small business or a CPA practice, money judiciously saved is funds that are made available for the business.
Crises are opportunities to grow stronger. In the time of COVID-19, businesses have closed with little or no hopes of reopening. Crisis-proofing in such a harsh landscape can involve the need to embrace change, which may include significant modifications, such as a change of role or business direction., Being open to business readjustments can help your business prove sustainable. Businesses often begin based on passion and dreams, but they need a lot of work, knowledge, and understanding to stay sustainable and to thrive. Choosing partnerships with an outsourcing services provider can prove invaluable to an emerging CPA practice or a recovering small sized business. Such a partnership ensures the resilience to sustain and grow business operations. Choosing the right partner is important to ensure the business progresses without losing more money or revenue than it already has.
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