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How Your Local CPA Can Help Your Small Business Beat Inflation

The financial world is still talking about the Bureau of Labor Statistics’ news that inflation rose to a 40-year high of 8.5% in March 2022. As Americans fill their gas tanks and plan weekly grocery budgets, prices are going up everywhere! The Federal Reserve raises interest rates to hedge against Covid-19 has created a volatile business climate, one where even the smallest adjustmenpotential recession to ease market concerns as America’s small businesses look for ways to beat inflation. But is it enough?

Rising inflation puts added strain on our nation’s small businesses. A record number of business failures over the last two years due to t in expenditures could mean staying in the black. Did you know the same local CPA you used to do your small business taxes can help you beat inflation? Notably, many local CPAs also handle out-sourced CFO services.

If you’re worried about inflation’s influence on your business, this collection of inflation-beating tips and strategies should help you sleep a little better.

Tips and Strategies to Beat Inflation

Stay Informed

Beating inflation means your small business knows about negative economic statistics coming out of organizations like the Bureau of Labor Statistics (BLS). Staying ahead means you have information that helps you plan. Economists and economic forecasters have been warning of coming inflation for several weeks. Paying attention to financial news helps your business stay ahead of the “bad news” so you can plan for it. 

A decade and a half ago, Americans coped with the Great Recession and a prolonged recovery that followed. It was those companies who took steps to hedge against inflation that showed the best shareholder investment and business longevity.

Once you understand the negative (and positive) economic news of the broader economic climate, your business will be better positioned to make intelligent financial decisions. For example, you must raise the prices for goods on your e-commerce website, but you don’t know the final mark-up prices to maintain your business. You could hire a local CPA and CFO financial advisor like PB Scala. As a certified professional financial officer, PB Scala has inside knowledge about financial matters that you could use to beat inflation. 

What Can a Local CPA/CFO Do to Help Your Small Business Beat Inflation?

Tip #1: Hire a Local CPA For a Financial Audit-Local CPAs to have knowledge of local economic issues, which is very useful for local business owners like HVAC companies. An audit by an official CPA helps you understand little things about your business so you can find places to cut spending. 

CPAs use specific standards of practice (such as GAAP) that produce qualifying records like financial statements. These documents are crucial for things like business loans. Because CPAs must look at internal financial processes, they can offer unique insights into how your business aligns with current federal and state laws. As recent government relief for small businesses shows, this recordkeeping is crucial for small businesses.

Tip #2: Hire a CFO For Short- and Long-Term Planning-Your business will likely need short- and long-term financial planning. Short-term planning helps with inflation while long-term addresses inflation that leads to recession. 

Short-term examples include things like targeted price increases. The point is to think of ways to minimize inflationary spending. Think of these types of short-term planning goals as non-strategic. Your local CPA can help you with your current bookkeeping needs, so things like price increases don’t put you out of business. Ideally, hiring a local CPA like PB Scala, who handles CFO services, is the best tip.

Long-term planning is financial strategizing and thinking ahead so your business weathers potential recession. This blog mentioned business owners should stay informed. CFO services know how to take the datasets put out by the federal government and turn them into actionable financial strategies.

Tip #3: Don’t Shy Away from Business Growth-Depending on the industry, inflation and potential recession aren’t always bad. With an audit and short- and long-term planning completed, your business is favorable to plan for after inflation. Inflation isn’t a traditional investment vehicle.

As a business owner who pays attention to financial news, you could learn what other CPAs think about the coming year’s business outlooks. Large accounting firms have accurate pictures of their businesses. If large corporations hire CPAs and CFOs and forecast the favorable financial potential for an industry, go with it. 

Pulling It All Together 

In simplest terms, the three tips listed above represent a process for helping your small business through times of inflation and recession. Know what you have in minute details to cut little things here and there that allow you to use strategic thinking for long-term planning. From maintaining a status quo to business expansion, using what you have to plan for the future is sound financial advice. 

Of course, beating inflation means your small business went beyond maintaining the status quo. Pulling the three tips together in one process helps business owners make minor financial adjustments that don’t hurt as much as possible. Investigate, go lean, then make a plan for the future.

Parting Words

Running a small business isn’t easy. But it can be rewarding if you have a comprehensive grasp of your company and industry. Business owners should pay attention to financial news. Negative inflation numbers don’t just appear out of thin air. Economists and other experts saw inflation coming and discussed actions for weeks. An informed business owner would have taken steps weeks ago. But it’s never too late to seek financial advice from a CPA and/or CFO, particularly now as recession talks start creeping into news broadcasts. If you could use some local financial advice for your small business, give PB Scala a call.

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