It is undeniable: running a business is challenging. There is a reason why many small businesses often collapse and disappear from existence within two years of the first opening. Generally, one of the chief causes behind this is abysmal financial management.
When starting a business, it’s easy enough to acquire a loan and start splashing out on equipment, stock, marketing materials, and whatever else is deemed necessary. However, newcomers to the business world often overlook the money needed after this initial cash injection. The loan is gone, there’s no income coming in, and there are stacks of bills that need paying.
There’s a reason why the financial situation can go out of control immediately: the majority of small businesses don’t make use of an accountant. While they may implement accounting software, this can only do so much. An accountant is more than simply someone to total up your business figures.
If you require convincing, here are six reasons why your business needs to hire an accountant:
The books are balanced
Of course, balancing the books is the primary reason why people will initially look into hiring an accountant.
The reason for this is simple: bookkeeping is a challenging task. It might seem like an easy duty on the surface, but it involves your cashbooks, ledgers, expenses, daily transactions, and more. Continually keeping track of these figures is tricky, especially if you stick with a pen and paper method for bookkeeping. You’re also liable to make mistakes by doing your books manually.
There is a solution in the form of accounting software. Yet not everyone is tech-savvy, and these types of software packages can be intimidating for newcomers.
With an accountant, they will be able to handle all of the books, use the best software to ensure all figures are correct, and take this burden away from you.
Advice on key business decisions
It’s recommended to hire an accountant that also has a background as a business adviser. For instance, if you enlisted the services of an experienced chartered accountant from respected law firm Alliance Accounting, they would also be able to supply helpful advice on critical business decisions.
After all, these types of major decisions can make or break your company. One wrong move could see your business fold. If you get it right, however, your outlet could prosper. With these high stakes involved, getting a second opinion from someone knowledgeable about the situation is clearly a good idea.
An accountant will be able to look at the numbers involved, calculate the implications and possible consequences, and provide you with their take on the decision.
The taxation process is handled
Nobody enjoys filing their taxes. This is particularly the case for newcomers who now have various different forms to fill out, deductions to consider, and everything else that makes business taxation a stress-filled headache. Plus, that is not considering the fines and other issues you could have with the IRS if your taxes are filed incorrectly.
If you have an accountant who is knowledgeable in this field, all of those problems disappear instantly. An experienced accountant has a complete understanding of the taxation systems in place. They will be able to guide you on how to file all the forms, avoid an audit, and even negotiate with the IRS if needed.
Also, tax rules can change several times each year. As a business owner, you will struggle to keep track of these changes. For an accountant, however, it’s their job to remain informed about any modifications to the rules.
Keep track of the numbers
While it’s well-established that an accountant will do the bookkeeping for your business, it’s often overlooked how they will analyze the numbers produced on your financial reports. They can measure the figures, set attainable goals based on these figures, and keep track of the progress your business is making towards them.
Admittedly, software such as QuickBooks can produce helpful financial reports with just a click of the mouse. With that said, it only supplies you with facts and figures – it’s unable to observe and understand the reports. An accountant can, and that can make all the difference.
Furthermore, you might struggle to find time to study the numbers of your company. Doing this properly can take several hours after all, and business owners simply don’t have that type of time to spare. Bring in a professional accountant, and you have someone to keep a constant eye on your finances – and they can then use this knowledge to further improve your business.
Plan for the future
In the business world, it’s essential for your company to continually grow. Without doing this, rival competitors may spot a gap in the market, usurp your business, and take your customers in the process. On the flip side, attempting to grow your business could end up killing it off.
Ultimately, you need to put together a strong plan for any attempts at growth. By doing this, you will be able to thoroughly analyze the implications of any potential changes and see how to best implement the likes of new product lines or relocating to bigger premises.
For an effective plan, you will require your accountant to take a close look at the figures and ideas. Don’t think they’ll just be there to scupper any growth plans, either. They may block off one path, but they will provide a more suitable one towards success.
You save time, energy… and your sanity
If your business operates on a tight budget, you might be wondering how you would be able to afford to hire an accountant. Instead, look at it differently – how much time and energy would you save by handing the bookkeeping to someone else? It’s probably a lot, right? Plus, that is not even factoring in the possible filing errors that could cause fines or losses from wayward business decisions.
As a business owner, you should focus all your energy on, well, running the business. With an accountant, you suddenly free up more time and energy that can be best used elsewhere, and you will have a clear focus on your business goals.
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