I was having a chat with a banker who was rolling his eyes when we were talking about some start-ups that were looking for loans and lines of credit.
Now he is an aggressive banker who is always looking for new clients and enjoys assisting clients get those loans and lines of credit. So the eye rolling comes from those who are trying to do everything by themselves and on the cheap.
As he recounts when they come in looking for those loans or a lines of credit, they are asked for financials and past tax returns, they tend to have a far off stare and then blink. They keep their records in shoe boxes (yes we have some client who give us these) and their business returns are hand written, with obvious errors. Business returns have levels of complexity that H&R Block, Jackson Hewitt and Liberty Tax Service choose not to attempt.
So these start-ups have limited access to outside money, potential IRS difficulties and possibly poor business structure choice for their needs. After meeting with a client and discussing their organization choice and listening to their plans and goals, we have been instructed to assist in changing the corporate entity structure.
It may seem cheaper to not work with a CPA in the beginning, but for those who do find us early enough feel that they are well served by working with us.