A Crypto CPA is not someone you want to hire without a lot of thought.
With all things crypto constantly in the news, more people are learning about these assets. And as popularity grows, so seems to be the value of many forms of blockchain.
As a business owner, it makes sense to explore how your business will interact with crypto. Several high profile companies accept some forms of crypto as payment. Others own some tokens/coins as an asset, expecting it to appreciate in value.
If you’re considering any of these, it’s a good idea to speak with an accountant who understands blockchain. But what do you ask?
Here are five questions that’ll get the ball rolling.
1. How Can My Business Gain from Using Crypto and Blockchain Tech?
Part of the reason crypto is popular is due to the grassroots nature of it all. This comes from things like the subject of decentralization, ordinary people gaining wealth, and easier access through platforms (i.e. Robinhood and Coinbase).
That said, there are other reasons we’ve seen a massive rise in blockchain interest. Things like:
- The tech: Some coins/tokens offer incredible payment processing power (although mostly unrealized at this point).
- The investment: Some companies covered losses during the recent shutdowns mostly by investing in certain forms of crypto.
- The future of currency: Blockchain is, at its core, an accounting/tabulation technology. A big goal of these cryptocurrencies is to disrupt the way we use fiat currencies..
A qualified CPA will understand:
- The practical uses like hedging against inflation, fluid/quick transfers, potential for gains, and even mining for revenue
- Ways to accurately track the crypto accounting process
- How involving your business in crypto as payment may attract younger investors and product buyers
- Whether or not there is even any benefit for your business to explore use cases for cryptocurrencies or other digital assets
Note: Of course, you (the owner/founder) use all of this information to decide how your business will employ this technology.
2. Should I Accept Crypto as Payment?
While the first question involves a larger scope, you’ll want to bring it to the practical level. The quickest way to involve your organization with cryptocurrency is to buy some. And the second quickest is to accept certain coins/tokens as payment for your goods and services.
If you’re reading this article, you’ve likely considered accepting either bitcoin, doge, or another crypto.
A qualified CPA will understand:
- The pros and cons of taking digital currency
- They’re still a CPA, so they should understand where your business is and if it makes fiscal sense, based on your current financial situation
- Know the current crypto cycle and help you understand volatility risk of holding the assets (to help you consider timing)
3. Is Crypto a Useful Investment Asset?
Another practical question here that needs answering. If you decide to accept crypto, what do you do with it from there?
- Immediately turn it into fiat and stow it in your regular business accounts?
- Move it into another investment form?
- Keep some (or much) of it as crypto?
A qualified CPA will understand:
- Wild swings that come with the cryptocurrency markets
- Again, a qualified accounting partner understands your business and helps point to things like where money is better spent (e.g. cash flow, hiring, big expenses)
4. What are the Tax Implications of Owning/Using Crypto?
The first three questions help you gauge whether the CPA you’re speaking with truly understands crypto (or not). Now, it’s time to test their knowledge on current regulations and taxation policies.
A qualified CPA will understand:
- The current regulation, reporting, and taxation standards for cryptocurrency (as well as news of potential changes to these areas)
- Not just the easy stuff, a solid accounting solution should understand deep aspects of this asset class (i.e. hard forks, tracking lots of transactions, DeFi activity, and even tax problems that come from mining)
5. What Experience Do You Have with Clients Who Own/Utilize Crypto?
At this point, they either have the knowledge or you’ve politely ended the call. But does the CPA you’re speaking with have actual experience with crypto accounting?
Do they have real clients who:
- Individually own coins/tokens, and use them to buy/sell goods?
- Are businesses who use crypto, hold them as assets, or gain them through mining?
- Have actually used their services to successfully file crypto taxes, without penalty?
Work with Crypto CPA Experts
At Founder’s CPA, we work with real cryptocurrency owners, and businesses who utilize blockchain technology in a variety of ways. We’re also ready for your questions about this topic, or any other accounting-related questions you have.
Ready to accurately and confidently handle crypto transactions? Get in touch with us today.
