Taxes are as complex, tedious, and ever-changing as you think they are. Be intimidated, it’s valid. That’s why it’s important you understand how to leverage your tax professional’s skill set to manage this part of your business. Navigating the complexities of tax preparation can leave you feeling lost, especially for law firms aiming for sustained profitability and cash flow. How does it all work together and what is this tax strategy thing? How does it tie into my profits and what is cash flow?

We’re here to help you understand just all of it!

Navigating the financial landscape of a law firm can be complex, especially when it comes to deciding who to trust with business advice. Relying solely on your tax preparer for business advice can be problematic. While tax preparers excel in compliance and minimizing tax liabilities, they often lack the broader business strategy perspective that a CFO or financial advisor provides. A CFO, especially a fractional CFO, offers comprehensive financial oversight and strategic planning that align with your long-term goals. Tax preparers focus on past financial data, whereas CFOs look ahead, making forward-looking projections essential for business growth.

Take Erica’s story, for example. After losing her bookkeeper due to conflicts with her CPA, Erica realized she needed a change. Her CPA’s limited perspective was stifling her law firm's growth. The CPA fired Erica’s independent bookkeeper for overstepping boundaries, despite the bookkeeper’s efforts to help Erica achieve her financial goals. This situation highlights the pitfalls of taking business advice from a tax preparer who only focuses on historical data and compliance.

A good CFO asks the right questions and understands your business's nuances, ensuring that every financial decision supports your long-term objectives. They provide financial foresight, helping you navigate the future rather than just reviewing the past. For instance, a tax preparer might suggest cutting staff costs based on a snapshot of your payroll expenses, without considering the strategic investments you’re making for future growth. In contrast, a CFO will understand the value of your team and offer advice that balances immediate tax benefits with long-term success.

Erica's experience underscores the importance of choosing the right financial advisors. Her CPA specialized in audits, and her fear of being audited kept her from exploring growth opportunities. However, less than 3% of businesses get audited, and focusing solely on audit prevention can limit your business potential. By working with a CFO who could grow with her, Erica saw the potential for tens of thousands of dollars in savings and increased revenue.

Navigating business finance means understanding who your key financial players are and how to work with them effectively. Don’t wait until you reach a breaking point to seek change. If you feel held back in your law firm finances but don’t know where to start, consider working with Core Solutions Group. Our experienced CFOs and financial advisors can help you prepare clean, accurate financial reports and collaborate seamlessly with your tax preparer for the most accurate tax preparation. Contact us today to learn more about how we can assist you in achieving financial freedom and business growth.

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