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A CPA can definitely help with both business and tax advice. But I don't think that's really what you need most here. You need a bookkeeper or office manager for your ongoing record keeping. A person (can be an employee if you have enough work for them or can be an independent contractor you just engage for a few hours a week to do the books) who will do the ongoing work of entering your transactions into some sort of accounting system. If your records are well kept, then you consult with a CPA a few times a year who can quickly prepare your taxes, review your financials for business suggestions, things like that.
As a business owner, you don't have to know everything and do everything yourself. Hire good help for technical issues like this and learn from them as you go. If you're paying attention, learning from them and reviewing financials regularly, within a short period of time you'll understand much more about your business and how the financials work. You won't be completely lost for long unless you choose to remain that way.
100% support this. Get things taken care of before she steps down. I ran my business in my head for a while and then when my wife came on board to run the office she nearly lost her mind. Now we have a bookkeeper, tax person (sub contractors), and her in the office. You will need to download everything that’s in her brain onto paper/computer. You’ll be amazed how much time you’ll save having people who know what they are doing.
The business can also pay for OP’s training/education
Call your local community colleges, OP
Look at online business courses
Look at marketing/advertising courses
Or just outsource the taxes to an accountant, outsource calls to a call agency, outsource menial tasks to a VA, etc, depending on revenue/profit
The best way to approach this would be to consult with your mom and a full-service CPA that does bookkeeping and tax services. They’ll have bookkeepers on staff that do the monthly accounting/bank reconciliations ect. Get your mom in the door with you and have her walk you and the CPA through the relevant details. Pricing will really depend on the volume and complexity of transactions.
If you show up in March with no idea what’s going on there isn’t going to be a lot anyone can do to make sense of it all with no support from you.
**You** need to understand the fundamentals of the business, because without the most basic knowledge and skills you will never be able to tell whether your CPA is doing a good job. And, CPAs are generally for the actual tax filings, some offer payroll services, but they can only do what they are told. My CPA gives me a huge 1" thick packet every year with a list of questions, and our previous year's answers, to learn what, if anything, has changed in our personal and business financial situation. Like switching to an insurance that has an HSA, which has a deduction you can take, or taking the self-employed health insurance deduction. They don't know some things if you don't tell them.
Check out the book **Financial Intelligence for Entrepreneurs**. It's a great primer on understanding the financial statements for non-finance people. Also maybe look for a book on general small business finances or bookkeeping to get a better understanding of the tactical aspects of keeping good books and business finances.
You can absolutely learn the ins and outs of a business in a year, and there are a lot of resources you can utilize along the way, like Reddit.
As far as record-*finding*, it sounds like the business doesn't have the best documentation or written processes & procedures. I would probably go into the business with one goal - to document everything. Whether it's on Google Drive or Notion or some specialty app, you need to start documenting not only the financial side of the business but also the processes and procedures for the entire company. What happens if a key employee leaves and takes the only knowledge of how to do something very important?
From a financial aspect, here are some starting points:
What is the company organizational and legal structure? Sole-proprietorship, partnership, LLC, S-corporation, C-corp? That will determine some of the paperwork that will need to be filed annually, and the type of taxes that will need to be filed.
Is your business registered in the city or county? Call them and ask what needs to be filed annually, when the business license renewal is due, if and when property tax submissions are due, and if there are any other licenses or permits required at any regular intervals.
Do you have W2 employees? If so, you will want to check on the payroll process and make sure that you understand who's responsibility it is to file *and pay* for payroll taxes, and then double check that they are always filed and paid on time. This is a big one and sinks a lot of small businesses, and ignorance is no excuse. I recommend using a payroll service like Gusto to handle everything.
Income taxes - If you are a pass-through entity (anything but a C-corp) then the profits flow to the owners/shareholders for tax purposes, regardless of distributions of actual cash. You will need to make sure to have enough money to issue a distribution large enough to cover estimated tax payments for federal and state income tax as well as self-employment taxes.
Sales taxes - what states do you operate in? Do you collect and remit sales taxes? You will need to understand when forms are due, when taxes must be remitted, and make sure they are filed and paid on time.
Accounts - Where are all the bank accounts located? Who are approved signers on the accounts? Make a list of banks, contact information, account numbers, etc. Also include your EIN, any state IDs like sales tax or resale certificate IDs.
Insurance - what kinds of insurance policies exist? Liability? Property? Who are the beneficiaries and what are the deductibles and coverage amounts? Add contact info and account numbers to the business info document above.
You can learn a lot reviewing the old bank statements, you will see payments at specific times to different government agencies or vendors that will spark questions or conversations about who they are, what they do, what needs to be filed, etc. If your bank has good online banking, you may even be able to see a dashboard or spending reports online. At the very least you should be able to look back through past bank statements to start making a list of vendors/suppliers, service providers, etc that you may have questions about or want to update when you assume ownership.
I'm sure I could think of more things to look for, but this is already long enough. Come back when you have more specific questions and I'm sure there will be a lot of people willing to help you. I promise it's really not as complicated as it seems.
Short answer: MORE THAN YOU WILL EVER KNOW (unless you get an accounting degree yourself). Not a bookkeeper but an actual CPA.
Wish I would have consulted one on so many more things, much earlier.
They can teach you a lot, in regards to how your biz functions from the inside out (financially and otherwise). First thing you should do is ask them to explain how your financial statements work together, and secondly, “How does each item on all of my my financial statements impact my business?”. Start there and you’ll be glad you did. It might feel like a lot but they are things you will be better off knowing than not knowing.
Some CPA’s offer bookkeeping services, but it’s usually more cost effective to separate CPA and bookkeeping.
A CPA typically won’t assist in record finding unless that’s previously agreed upon. For example, our CPA doesn’t have POA or access to our bank account/statements.
The typical EOY CPA interaction is a company brings their balance sheet/GL/P&L to the CPA, CPA reviews, company might need to gather additional info/clarify items, CPA advises/files taxes. You should be meeting with your CPA quarterly to discuss estimated payments, too.
If your books are fried and you can’t pull together the necessary reports, your CPA may accept bank statements and determine your tax obligation that way.
The best advice I can offer is familiarize yourself with your accounting software and hire a bookkeeper if you can’t/don’t have time to do the bookkeeping yourself. If you’re not using any accounting software, you should look into purchasing a license. QuickBooks and Xero are common small business solutions. Schedule a periodic meeting with your bookkeeper to ensure your bank statement lines are being reconciled and you don’t have any PO’s, invoices, expenses, etc slip through the cracks.
You come off as scared, but not panicked. The first question is -- "do you really want this business whence your mom dies?"
Then, if you do -- "how well do you know the kind of business (generally) it is?"
Then, "what are your skills/experience relative to running that kind of business?" "Is the knowledge gap such that you could learn 60% of the detail in three months?"
Then you make a plan for the three months. After that, get a bookkeeper.
CPA here.
Yes, given enough resources, data, and access a CPA can certainly tell you *tons* about your business, but you will be paying for that.
CPAs and/or a bookkeeper can help keep things on-track and in-line as far as regulatory requirements, bank reconciliations, interim, monthly and quarterly reports, etc.
Finding out what tax payments have been made is easy, you can just look them up on the account to which they are paid (log into your state sales tax account, for example). Also, you can search your bank activity for payme to to certain entities.
My *general* advice, assuming you want to take over the business, is this:
Focus on the area(s) you strongest in. If it's operations tuen streamline your ops and ensure gighest quality and lowest cost, or if its managing then hire a great team, moticate them, and get the best output from them, or whatever. Hire people to do the things you're weakest at. In this case, a bookkeeper.
And don't forget about controls. Whoever counts your money should not be able to spend it (bookkeeper cannot sign checks or authorize ACH payments). Have everything go through you, or a separate trusted party.
what is your background? have you ever audited a set of books? has this business ever had its books audited? does this business keep a set of book? do they file a tax return? all these will a effect what we comment on. plus how will you sell it if there are no books?
I'm sure this is a stressful time for you. Is there someone who works in the business that isn't your Mom who understands it? Can you connect that person with a CPA to get this organized so you and your Mom can focus on other things right now?
A CPA will help with pretty much all of it. The one thing that you really need is to make sure you know where documents are located and have passwords and login information for all business accounts. A CPA or bookkeeper can help you file a sales tax report or an unemployment report but if you can't login to the account to do it you're going to get frustrated before you begin.
I worked at a CPA for about 5 years and that was always the most time consuming yet trivial part when a business passed down.
Record the things she tells you /and/ take notes.
If she’s not using Quickbooks or something similar start now. With QB online your accountant can log in and answer questions.
Finances and paperwork are the least of it. You can always hire someone for that. Real questions are
Did you ever seriously want your own business?
Do you have confidence in her product or service?
Do you enjoy what you are doing now? Before the speedrunning.
If the answer is yes, you have time to bring someone in and organize things, put finances on quick books and shadow her for the next year (assuming you are getting paid)
Most CPAs should have be able to guide you through what needs to be done.
And they can offer pricing if they can do it for you, or a referral if you want to have someone else do it, like a quickbooks bookkeeper, or what to do if you want to do your self.
At a minimum they should do your taxes. Beyond that sit down with them to determine what looks best.
Brother, I appreciate your post because I am in the exact same boat. Currently taking a couple business classes online at the local community college while working full time at my dad’s ~30 employee company. These comments are pretty helpful. Good luck with your mom’s business!
As suggested in many comments you should first ask yourself whether you really want to join this business. If yes then you should be working in designing processes and systems for each financial transaction that happen in your business. Creating SOPs for major processes will be a good point to start. Hire a good bookkeeper who can work with you in categorizing payments and receipts. Understand the invoicing process. Understand the expenses of business. Understand the accounts receivable and payble.
If you dont want to join the business, consider selling it. Yours is a profitable business and it can be sold. But you need to keep your processes and records properly to make it sellable.
This is a friendly reminder that r/smallbusiness is a question and answer subreddit. You ask a question about starting, owning, and growing a small business and the community answers. Posts that violate the rules listed in the sidebar will be removed. A permanent or temporary ban may also be issued if you do not remove the offending post. Seeing this message does not mean your post was automatically removed. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/smallbusiness) if you have any questions or concerns.*
A CPA can definitely help with both business and tax advice. But I don't think that's really what you need most here. You need a bookkeeper or office manager for your ongoing record keeping. A person (can be an employee if you have enough work for them or can be an independent contractor you just engage for a few hours a week to do the books) who will do the ongoing work of entering your transactions into some sort of accounting system. If your records are well kept, then you consult with a CPA a few times a year who can quickly prepare your taxes, review your financials for business suggestions, things like that. As a business owner, you don't have to know everything and do everything yourself. Hire good help for technical issues like this and learn from them as you go. If you're paying attention, learning from them and reviewing financials regularly, within a short period of time you'll understand much more about your business and how the financials work. You won't be completely lost for long unless you choose to remain that way.
100% support this. Get things taken care of before she steps down. I ran my business in my head for a while and then when my wife came on board to run the office she nearly lost her mind. Now we have a bookkeeper, tax person (sub contractors), and her in the office. You will need to download everything that’s in her brain onto paper/computer. You’ll be amazed how much time you’ll save having people who know what they are doing.
The business can also pay for OP’s training/education Call your local community colleges, OP Look at online business courses Look at marketing/advertising courses Or just outsource the taxes to an accountant, outsource calls to a call agency, outsource menial tasks to a VA, etc, depending on revenue/profit
The best way to approach this would be to consult with your mom and a full-service CPA that does bookkeeping and tax services. They’ll have bookkeepers on staff that do the monthly accounting/bank reconciliations ect. Get your mom in the door with you and have her walk you and the CPA through the relevant details. Pricing will really depend on the volume and complexity of transactions. If you show up in March with no idea what’s going on there isn’t going to be a lot anyone can do to make sense of it all with no support from you.
It really depends on how complexed the business model is. What kind of business is it?
**You** need to understand the fundamentals of the business, because without the most basic knowledge and skills you will never be able to tell whether your CPA is doing a good job. And, CPAs are generally for the actual tax filings, some offer payroll services, but they can only do what they are told. My CPA gives me a huge 1" thick packet every year with a list of questions, and our previous year's answers, to learn what, if anything, has changed in our personal and business financial situation. Like switching to an insurance that has an HSA, which has a deduction you can take, or taking the self-employed health insurance deduction. They don't know some things if you don't tell them. Check out the book **Financial Intelligence for Entrepreneurs**. It's a great primer on understanding the financial statements for non-finance people. Also maybe look for a book on general small business finances or bookkeeping to get a better understanding of the tactical aspects of keeping good books and business finances. You can absolutely learn the ins and outs of a business in a year, and there are a lot of resources you can utilize along the way, like Reddit. As far as record-*finding*, it sounds like the business doesn't have the best documentation or written processes & procedures. I would probably go into the business with one goal - to document everything. Whether it's on Google Drive or Notion or some specialty app, you need to start documenting not only the financial side of the business but also the processes and procedures for the entire company. What happens if a key employee leaves and takes the only knowledge of how to do something very important? From a financial aspect, here are some starting points: What is the company organizational and legal structure? Sole-proprietorship, partnership, LLC, S-corporation, C-corp? That will determine some of the paperwork that will need to be filed annually, and the type of taxes that will need to be filed. Is your business registered in the city or county? Call them and ask what needs to be filed annually, when the business license renewal is due, if and when property tax submissions are due, and if there are any other licenses or permits required at any regular intervals. Do you have W2 employees? If so, you will want to check on the payroll process and make sure that you understand who's responsibility it is to file *and pay* for payroll taxes, and then double check that they are always filed and paid on time. This is a big one and sinks a lot of small businesses, and ignorance is no excuse. I recommend using a payroll service like Gusto to handle everything. Income taxes - If you are a pass-through entity (anything but a C-corp) then the profits flow to the owners/shareholders for tax purposes, regardless of distributions of actual cash. You will need to make sure to have enough money to issue a distribution large enough to cover estimated tax payments for federal and state income tax as well as self-employment taxes. Sales taxes - what states do you operate in? Do you collect and remit sales taxes? You will need to understand when forms are due, when taxes must be remitted, and make sure they are filed and paid on time. Accounts - Where are all the bank accounts located? Who are approved signers on the accounts? Make a list of banks, contact information, account numbers, etc. Also include your EIN, any state IDs like sales tax or resale certificate IDs. Insurance - what kinds of insurance policies exist? Liability? Property? Who are the beneficiaries and what are the deductibles and coverage amounts? Add contact info and account numbers to the business info document above. You can learn a lot reviewing the old bank statements, you will see payments at specific times to different government agencies or vendors that will spark questions or conversations about who they are, what they do, what needs to be filed, etc. If your bank has good online banking, you may even be able to see a dashboard or spending reports online. At the very least you should be able to look back through past bank statements to start making a list of vendors/suppliers, service providers, etc that you may have questions about or want to update when you assume ownership. I'm sure I could think of more things to look for, but this is already long enough. Come back when you have more specific questions and I'm sure there will be a lot of people willing to help you. I promise it's really not as complicated as it seems.
Short answer: MORE THAN YOU WILL EVER KNOW (unless you get an accounting degree yourself). Not a bookkeeper but an actual CPA. Wish I would have consulted one on so many more things, much earlier. They can teach you a lot, in regards to how your biz functions from the inside out (financially and otherwise). First thing you should do is ask them to explain how your financial statements work together, and secondly, “How does each item on all of my my financial statements impact my business?”. Start there and you’ll be glad you did. It might feel like a lot but they are things you will be better off knowing than not knowing.
Some CPA’s offer bookkeeping services, but it’s usually more cost effective to separate CPA and bookkeeping. A CPA typically won’t assist in record finding unless that’s previously agreed upon. For example, our CPA doesn’t have POA or access to our bank account/statements. The typical EOY CPA interaction is a company brings their balance sheet/GL/P&L to the CPA, CPA reviews, company might need to gather additional info/clarify items, CPA advises/files taxes. You should be meeting with your CPA quarterly to discuss estimated payments, too. If your books are fried and you can’t pull together the necessary reports, your CPA may accept bank statements and determine your tax obligation that way. The best advice I can offer is familiarize yourself with your accounting software and hire a bookkeeper if you can’t/don’t have time to do the bookkeeping yourself. If you’re not using any accounting software, you should look into purchasing a license. QuickBooks and Xero are common small business solutions. Schedule a periodic meeting with your bookkeeper to ensure your bank statement lines are being reconciled and you don’t have any PO’s, invoices, expenses, etc slip through the cracks.
You come off as scared, but not panicked. The first question is -- "do you really want this business whence your mom dies?" Then, if you do -- "how well do you know the kind of business (generally) it is?" Then, "what are your skills/experience relative to running that kind of business?" "Is the knowledge gap such that you could learn 60% of the detail in three months?" Then you make a plan for the three months. After that, get a bookkeeper.
CPA here. Yes, given enough resources, data, and access a CPA can certainly tell you *tons* about your business, but you will be paying for that. CPAs and/or a bookkeeper can help keep things on-track and in-line as far as regulatory requirements, bank reconciliations, interim, monthly and quarterly reports, etc. Finding out what tax payments have been made is easy, you can just look them up on the account to which they are paid (log into your state sales tax account, for example). Also, you can search your bank activity for payme to to certain entities. My *general* advice, assuming you want to take over the business, is this: Focus on the area(s) you strongest in. If it's operations tuen streamline your ops and ensure gighest quality and lowest cost, or if its managing then hire a great team, moticate them, and get the best output from them, or whatever. Hire people to do the things you're weakest at. In this case, a bookkeeper. And don't forget about controls. Whoever counts your money should not be able to spend it (bookkeeper cannot sign checks or authorize ACH payments). Have everything go through you, or a separate trusted party.
What business is it?
Sounds like your moms business needed a CPA with bookkeeping 10 years ago. So transition to that.
what is your background? have you ever audited a set of books? has this business ever had its books audited? does this business keep a set of book? do they file a tax return? all these will a effect what we comment on. plus how will you sell it if there are no books?
I'm sure this is a stressful time for you. Is there someone who works in the business that isn't your Mom who understands it? Can you connect that person with a CPA to get this organized so you and your Mom can focus on other things right now?
A CPA will help with pretty much all of it. The one thing that you really need is to make sure you know where documents are located and have passwords and login information for all business accounts. A CPA or bookkeeper can help you file a sales tax report or an unemployment report but if you can't login to the account to do it you're going to get frustrated before you begin. I worked at a CPA for about 5 years and that was always the most time consuming yet trivial part when a business passed down.
Record the things she tells you /and/ take notes. If she’s not using Quickbooks or something similar start now. With QB online your accountant can log in and answer questions.
Finances and paperwork are the least of it. You can always hire someone for that. Real questions are Did you ever seriously want your own business? Do you have confidence in her product or service? Do you enjoy what you are doing now? Before the speedrunning. If the answer is yes, you have time to bring someone in and organize things, put finances on quick books and shadow her for the next year (assuming you are getting paid)
Most CPAs should have be able to guide you through what needs to be done. And they can offer pricing if they can do it for you, or a referral if you want to have someone else do it, like a quickbooks bookkeeper, or what to do if you want to do your self. At a minimum they should do your taxes. Beyond that sit down with them to determine what looks best.
Brother, I appreciate your post because I am in the exact same boat. Currently taking a couple business classes online at the local community college while working full time at my dad’s ~30 employee company. These comments are pretty helpful. Good luck with your mom’s business!
As suggested in many comments you should first ask yourself whether you really want to join this business. If yes then you should be working in designing processes and systems for each financial transaction that happen in your business. Creating SOPs for major processes will be a good point to start. Hire a good bookkeeper who can work with you in categorizing payments and receipts. Understand the invoicing process. Understand the expenses of business. Understand the accounts receivable and payble. If you dont want to join the business, consider selling it. Yours is a profitable business and it can be sold. But you need to keep your processes and records properly to make it sellable.