Adequate accounting is one of the most neglected areas in small businesses. Many businesses fail to realize the importance of having a small business accountant; right from the start.
Hence, they make assumptions that they can conduct the accounting duties by themselves or the bookkeeper is enough for the task. Though both assumptions are not wrong, it’s better to have a professional accountant handling the books for your business.
Unfortunately, having an accountant on retainer is expensive for a small business. So is hiring a full-time accountant.
Well, you don’t have to go with either. Instead, you can hire monthly accounting services on an as-needed basis. Here you only pay for the accounting service when you need it.
If you still think you don’t need an accountant for your small business, keep reading to find out the perks you deny yourself.
A Small Business Accountant Saves You Time and Money
Running a small business is a time-consuming endeavor because you have to keep an eye on everything. As a result to tend to wear numerous hats which include the manager, the supervisor, the bookkeeper, the salesperson, etc.
In most cases, you rarely have time to yourself, let alone time to do your business taxes. Depending on the scale of your business, it takes an average individual about 10 hours to prepare their taxes. This is valuable time you can use for personal relaxation with dear ones or even in growing your business.
In business time is money. Now, consider how much your time is worth. Is it $70/hr, $100/hr or even more.
Now would you rather forgo $1000 worth of ten hours of work to do your taxes or hire an accountant for a fraction of the same amount?
Remember a dollar saved is a dollar earned.
Proper Financial Record Keeping
Proper financial record keeping provides a clear picture of your business finances. It also enables you to avoid bad disputes with creditors, internal embezzlement, audits by the IRS and misappropriation of money.
Hiring an accountant for small businesses can assist in creating and maintaining a proper record keeping system. Furthermore, accountants are also well versed in financial bookkeeping tools. Hence, they can recommend the best tools that can make your record keeping as comfortable and efficient as possible.
For instance, if you don’t want to manually edit your books or take home your financial records; There are plenty of hands-free bookkeeping tools that accountants can recommend. Additionally, you can access the files via cloud technology whenever you want to have a look.
It’s always better to work smart; not hard.
Avoiding Tax Issues
Filing taxes is a sensitive issue, and as a result, it requires professional handling. Quite often, a business owner will mix up their personal and business expenses. When filling your taxes; this can be an issue if you make a mistake in the filling and you don’t want the IRS breathing down your neck.
Additionally, due to the lack of experience and adequate time, you’re likely to make a mistake in your filling. Remember a simple mistake can lead to hefty fines and penalties on your small business. However, with the assistance of an accountant, you can be confident that your taxes are in order and accurately filed.
Additionally, periodical forensic accounting and self –auditing is necessary as your business grows. The reason for these measures is to find and solve issues that could get flagged by the IRS beforehand. CPAs get forensic accounting training. The training involves seeking out irregularities in financial records. This can help prevent fraud within the business as well as an IRS audit.
Savvy Professional Advice
A common misconception about accountants is that they are only useful when filing taxes. This isn’t true. Accountants are some of the most business savvy professionals on the planet. It’s for this reason that it’s highly advisable to have an accountant’s opinion in every aspect of your small business.
It may seem too early to consult an accountant at this stage, but it is beneficial. An accountant can provide advice on the proper business structure to use for your small business start-up.
They can also analyze your business plan and help you make the right financial decisions from the get-go based on your financial compatibility.
These steps will ensure you don’t make any mistakes that could cost you a lot later in time.
After you hire a few employees in your small business, an accountant can still be useful in ensuring they get classified appropriately, i.e. per the law. Furthermore, business accountants for small business are well versed in payment processing and employee payroll management. They can also assist in ensuring your employees and contractors fill out their 1099s and W2 forms in good time for filing.
When Looking for Additional Funding
At some point, you will need to borrow additional funds. It could be to expand your business or create an emergency fund.
All lenders will always ask you to provide a financial statement. The document is a basis to determine if they can lend to you and if so; how much? You could google ‘How to prepare a financial statement?’ However, chances are you will not get approved.
Hence, to maximize the chances of your lender approving a loan; it’s highly advisable to let an accountant handle the financial statement for you.
In business, a budget is necessary to determine how to use the limited resources one has. How you budget your finances can make or break your business.
An accountant can assist you to appropriately allocate your budget to the key areas that will ensure the survival of the business as well as growth.
Finally on Perks of an Accountant for Your Small Business
There are plenty of other advantages that a small business accountant can provide for your establishment. The above benefits are the main reasons you should consider getting one for your small business.
If you are interested in other topics that relate to small business, visit our blog for more. Let us provide you with the necessary insights and tips to help you grow and thrive in your business.