What to know when choosing an accounting, tax, & advisory professional

Frequently Asked Questions

What makes High Impact CPA different than other firms?

Our focus is giving our clients the best experience possible and providing proactive guidance. The biggest complaint we hear is “my CPA doesn’t call me back” or “my CPA doesn’t have availability for me.” Because of this we limit the number of clients we take on at any given time to ensure we can maximize the value we bring to each engagement. We serve a small number of clients and serve them with excellence, communication, and availability. We are also more efficient because we combine all of your typical services (bookkeeping, accounting, tax, risk management, process improvement, technology implementation, etc.) all in one place.

Accounting FAQ's

What is the difference between accounting and bookkeeping?

Bookkeeping is the day-to-day recording and categorizing of transactions (income, expenses, bank activity). Accounting uses that bookkeeping data to produce financial statements, interpret results, ensure compliance, and advise on decisions like tax strategy, cash flow, and profitability.

What financial statements should a business owner review each month?

Most businesses should review (1) the Profit & Loss (income statement), (2) the Balance Sheet, and (3) a Cash Flow summary. Together, these show profitability, what you own/owe, and whether your cash position is improving or tightening.

What is the difference between cash and accrual accounting?

Cash-basis records income/expenses when money changes hands. Accrual records income/expenses when earned/incurred (even if cash hasn’t moved yet). Accrual usually provides better performance visibility; cash can be simpler for some small businesses.

What is a chart of accounts?

A chart of accounts is the structured list of categories used to organize transactions—income, cost of goods sold, operating expenses, assets, liabilities, and equity. A clean chart of accounts is essential for accurate reporting and useful decision-making.

How often should my books be updated?

Most service businesses do well with monthly bookkeeping; higher-volume businesses (ecommerce, multiple locations, payroll-heavy) often benefit from weekly or even daily categorization and reconciliation.

What does reconciling accounts mean and why does it matter?

Reconciliation is matching your bookkeeping records to bank/credit card statements to confirm completeness and accuracy. It reduces errors, prevents duplicate entries, and helps spot fraud or missed transactions early.

What is a month-end close and why do I need to do it?

Month-end close is the process of finalizing the prior month’s financials—reconciling accounts, coding transactions, recording payroll/loan activity, and producing statements. A consistent close creates reliable numbers for tax planning and decisions.

How do I know if my bookkeeping is behind?

Common signals: unreconciled bank accounts, “Ask My Accountant” growing, negative cash surprises, missing receipts, unclear owner draws, or financials that change dramatically each time someone “cleans them up.”

Should I separate business and personal expenses?

Yes! Separate bank/credit card accounts make bookkeeping cleaner, strengthen audit support, and simplify tax prep. Commingling is one of the fastest ways to create messy books and missed deductions.

What bookkeeping/accounting software should I use?

The “best” depends on complexity, payroll needs, integrations, inventory, and reporting. QuickBooks Online is common for small businesses; Xero is popular for clean workflows; some ecommerce stacks need specialized integrations. Our firm sets our clients up on either Quickbooks Online or Xero.

Tax FAQ's

What is tax planning (tax strategy) and how is it different from tax preparation?

Tax preparation reports what already happened for last year. Tax planning is proactive—projecting your tax liability, adjusting withholding/estimates, choosing the right entity/tax elections, and timing income/expenses to reduce avoidable tax.

How can I legally reduce my tax bill as a business owner?

Common levers include: clean bookkeeping, maximizing eligible deductions, retirement contributions, accountable reimbursement plans, entity/tax election review, and quarterly tax projections so you’re not reacting at year-end. (Exact strategies depend on your income, entity type, and goals.)

Should I be making quarterly estimated tax payments?

If you expect to owe tax that isn’t covered by withholding, you may need to pay estimated taxes periodically. The IRS outlines who must pay, how to calculate, and when payments are due.

When are quarterly estimated taxes due?

Due dates typically fall in mid-April, mid-June, mid-September, and mid-January, but can shift for weekends/holidays. Always confirm the IRS schedule for the current year.

Should I be an LLC or an S Corporation?

An LLC is a legal structure; S corp is a tax election. For some businesses, an S corp election can reduce self-employment taxes if payroll and compliance are handled correctly. It’s not always a fit. Good planning requires modeling income, payroll, and admin cost.

What is a "write-off" really?

“Write-off” usually means a deductible business expense that reduces taxable profit. It’s not “free”. It lowers taxes but still costs real money, and it must be ordinary/necessary and properly documented.

Is my home office deductible?

Potentially... if you meet IRS rules such as regular and exclusive use of a portion of your home for business. Documentation and correct method selection matter.

Can I deduct my vehicle or mileage?

Often yes for business-related driving, but you need contemporaneous mileage logs and clear separation between business and personal use. Which method is best (standard mileage vs actual expenses) depends on your facts.