Every business has goals they’re striving toward. Strategic planning will show you what you should focus on and what’s going to get your business closer to where you want it to be.
If you don’t put in the time to figure out what’s most important to your organization, you can end up underperforming. Your team might be busy—but with things that aren’t really important for organizational growth.
Strategic planning can sound complicated. That’s why a lot of companies like to avoid it. But it doesn’t have to be overly complex.
And that goes double if you have a little help. After all, why go it alone? There are qualified professionals that can help make the process go smoothly. In fact, you’re probably already working with a CPA who knows how to help.
Here are three ways your CPA can help with strategic planning:
1. Profitability Goals
Most business leaders aren’t likely to leave business decisions up to pure chance. But in order to craft a winning strategy, they need plenty of information about the financial details of their own companies.
CPAs can collect the right types of data, analyze it, and convert it into the intel you need to reach your long-range profit goals.
For example, your CPA could help you reevaluate your products’ or services’ pricing strategies, or even your approach to purchasing, to optimize profits for long-term success.
2. Acquisition Strategy
A company’s vision and mission statements are fundamental to its operations and growth. But it takes thorough financial information to make informed decisions that help a company reach its high-level goals.
Sometimes, this financial information is used to form acquisition strategies. Acquisition strategies are useful for finding ways to cut costs through divestiture and consolidation. They also help with creating value for the company’s investors by choosing the right targets.
For example, some industries have companies that flood the market. This leads to excess inventory, driving prices down. One potential acquisition strategy might be to purchase a competing company to break through the market and eliminate overproduction. In essence, you’d be consolidating manufacturing efforts.
But before any executives move forward with that kind of strategy, they’d want to consult with their CPA to get more information. If the long-term results look good, it’s a green light. But you’ll want some professional advice before you take a leap like that.
Recently, we evaluated and revamped the succession plans of a local business to help them get a much better tax result on the buy-out of the other shareholders.
By changing the structure of their plan and factoring in details that would enable the transaction to qualify for a special tax break, we saved the company and the purchasing and selling shareholders tens of thousands of dollars in taxes.
3. Risk Management and Risk Controls
Establishing risk management and control processes is one way that businesses keep tabs on their own status and health. Without a qualified CPA’s professional insight, those processes will largely be built on subjective data.
Most business leaders recognize the need to gauge risk management objectives and make them measurable and relevant. The best way to support that is through in-depth financial information from a CPA.
Certain kinds of financial information can even help you estimate how severe an impact certain risks might have on your business.
Make sure you don’t wait too long!
And we have a perfect example of why it’s important to get us involved before a particular transaction.
Recently, we were engaged to review the Sales Agreement and updated Operating Agreement for a local LLC in the process of adding a new member. An attorney had drafted the documents, but our review uncovered language that would have disqualified the owners’ eligibility for the new Qualified Business Income Deduction.
Because we were able to get involved on the front end of this transaction, we were able to reword things in time and save both sides big-time on their taxes.
If they’d waited too long to enlist our help, they would have been throwing cash away.
There’s always help.
Business owners and key decision makers get most of the credit for improving company performance, cutting costs, or adding value through savvy maneuvers. But CPAs often help behind the scenes. The insights and planning they provide help to guide the decisions of CEOs and managers.
That’s why a CPA is essential for your strategic planning team.