Before You Expand: 7 Financial Questions to Ask Your CPA
Before hiring, signing a lease or opening a second location, ask your CPA to help you understand the cash required, the sales assumptions, the full cost of the commitment and the reporting you will use to decide what happens next.
Your business moves. Your CPA should too. “Ask me in April” is a lousy answer when the lease is on your desk today.
A bigger business can mean a bigger cash problem. Put these seven questions on the table while the plan is still a plan.
1. How much cash will remain after the move?
Start with what is actually available, then put the new commitment beside the obligations you already have. A healthy-looking bank balance can include money needed for payroll, taxes, debt payments and the current business.
Ask for a month-by-month view of when cash comes in and when it leaves. Identify the lowest projected balance and discuss an appropriate reserve for your situation. Profit on a report does not tell you whether you can make every payment when it is due.
2. Have we counted the whole upfront cost?
The headline price rarely tells the whole story. For a location, list deposits, improvements, equipment, opening inventory and pre-opening payroll alongside rent. For a hire, include recruitment, onboarding, tools and time spent training.
Mark which estimates come from quotes, which are assumptions and when each payment is due. Separate one-time costs from recurring commitments. Ask your CPA to help identify what is missing; have the appropriate professional review contract and legal questions.
3. What has to happen for this to break even?
“The new location will pay for itself” needs a model behind it. How many additional customers, appointments or orders are expected? At what price? What cash costs come with each sale? How long will it take to reach that level?
Ask your CPA to distinguish a profit break-even calculation from the cash needed during the ramp-up. Then show the slower-sales version. A plan that only works on opening night deserves another look.
A simple cash example — hypothetical, not a Cachet client result
Suppose an owner allocates $50,000 to a move and spends $30,000 upfront, leaving $20,000. The new operation adds $10,000 in monthly fixed cash outflows. Additional receipts after variable cash costs contribute $6,000 a month in the base case, or $3,000 in a slower-sales case.
Cash point | Base case | Slower sales |
After upfront costs | $20,000 | $20,000 |
End of month 1 | $16,000 | $13,000 |
End of month 2 | $12,000 | $6,000 |
End of month 3 | $8,000 | −$1,000 |
Both versions still consume cash. The slower-sales case runs short in month three. This simplified illustration excludes taxes, financing, owner withdrawals and changes in the existing business. It is a prompt to build a complete forecast with your CPA, not a recommendation about how much cash any business should hold.
4. What does this hire really cost?
Salary is one line. Ask about payroll taxes, benefits, insurance, equipment, training and the time before the person reaches expected productivity. Separate estimates from verified payroll and benefit quotes.
Connect the role to a real operating constraint: serving more customers, reducing delays or freeing capacity. Ask which assumptions would need to change if revenue arrives later than the payroll commitment.
5. How do the financing options change the cash plan?
Bring the actual proposed terms. Compare upfront cash, fees, repayment timing and the obligations that continue if sales disappoint. Ask what information a lender or investor will need and which parts of the model depend on financing being available.
The SBA’s business-plan guidance calls for financial projections that match the funding request. That is a useful discipline; it does not establish loan eligibility or approval for your business.
6. Which tax, entity and compliance questions should we resolve first?
A new location, employee, equipment purchase or ownership change can raise questions your existing routine does not cover. Ask your CPA which accounting, payroll, tax or reporting matters need attention before the commitment, and what other specialist input is needed.
Bring documents and facts. There is no universal entity choice or automatic tax saving attached to an expansion. The right answers depend on the business and the current rules.
7. What will we review after the move — and who owns the next step?
Agree on the reports, review dates and responsibilities before things get busy. Compare actual cash, sales and costs with the assumptions. Decide what would trigger a conversation about spending, timing or the plan itself.
You should leave with an owner for each action and a date to revisit it. A damn good CPA relationship includes useful questions while you can still do something with the answers.
Bring a decision brief, not a shoebox
The move you are considering and the decision date.
Recent financial statements, cash balances and outstanding obligations.
Quotes, lease proposals, payroll estimates or financing terms that matter to the move.
Your sales assumptions, payment timing and a slower-sales scenario.
The question you need answered before you commit.
Share sensitive documents through an agreed secure channel; the first inquiry only needs a description of the move and your timeframe.
Put Cachet in the conversation before the signature
Cachet is a Beverly Hills CPA firm offering business consulting, cash-flow projections, financial reporting and payroll support. Meet the team, then tell us the business move you are considering and when you need to make the decision. Let’s find out whether Cachet can help.
General preparation guidance. A CPA must assess the facts and applicable rules for your business. Prepared with AI assistance for Florian’s marketing work; no CPA review or authorship is claimed.
