Many new entrepreneurs try to cut back on costs whenever possible when starting their business. This decision often involves trying to handle bookkeeping and accounting on your own. Perhaps you have an accounting background and maybe you’re great with numbers too. In this case, handling everything by yourself is the logical choice.
However, if you lack such experience and aren’t really a numbers person, you might be doing more damage than good to your business.
Poor accounting can seriously hurt your budding business. This is where a professional, experienced accountant can help you. Not only do they know how to manage your books, payroll, and taxes, but this will be their only job, whereas you wear many hats and can’t afford to focus on one aspect of your business.
Hiring an accountant can be the best investment in your business you have ever made.
If you’re still unsure whether an accountant can actually help your business, the list below will change your mind. Here are some of the things an accountant can help you with.
Setting Up Your Business
When you’re just starting your business, there are plenty of things you need to take into consideration. Should you be a Sole Trader or Limited Company? Which carries less risk and which is suitable for your situation?
You need to develop a solid business plan, determine the right legal structure for you, set up a business bank account, figure out how to track your expenses, etc.
It can be overwhelming to figure out all these things by yourself. And unfortunately, many businesses fail precisely because of the mistakes they make when setting up their business.
They get a great idea and they fail to be objective so they end up surprised when their poor business plan proves to be a mistake.
An accountant is already experienced in all the above-mentioned things and can help make the process less painful. They know what you need to do and they know how to do it.
Providing Business Advice
Professional business advice is essential for entrepreneurs, especially at the early stages of a startup or when scaling your business. An accountant will provide an objective point of view and they’ve worked with countless clients before, some of them from the same industry as yours.
Whatever problem or challenge you’re facing, be certain that an accountant has already seen and solved numerous problems like that before. Therefore, they possess the knowledge needed to predict and avoid certain risks.
Whatever the challenge may be, an accountant can help guide you in the right direction. You can read more on SCK Group on the different problems accountants can advise you on.
Ensuring You Pay the Right Amount of Tax
Tax season is one of the greatest concerns among business owners. It is everyone’s goal to avoid a tax audit but not everyone is so great when it comes to calculating our taxes and submitting them on time.
Plus, many business owners over or under-pay their taxes because of poor calculations. They are also not aware of the possible tax deductions, government incentives, etc. Accountants are professionals when it comes to taxes. They will prepare them for you and make sure you file your taxes on time to avoid any fines.
Skilled accountants know how you can reduce your tax bill and save money. They will ensure that you pay exactly what you owe and not a dollar more. Additionally, they will help you get the tax return that you’re entitled to.
Avoiding Accounting Mistakes
When you’re managing your bookkeeping and accounting on your own, you’re bound to make some data entry mistakes or miss something when reconciling balance sheets. While it’s human to make mistakes, they can add up and cause you to lose money in the long-run.
Especially if you’re trying to juggle your various tasks and manage each aspect of your business alone. Hiring an accountant means eliminating potential accounting mistakes.
Securing Loans and Attracting Investors
Sooner or later, your business will require a financial injection. This means you will almost certainly have to apply for a loan. Securing the necessary funding is much easier when you have an experienced accountant by your side. There is no one who better understands your financial situation than your accountant. They will present your case to the bank or potential investors and will significantly increase your chances of getting the money.
Creating a Business Budget
Poor budgeting is often the cause businesses fail. The reason is the fact they fail to create realistic budgets that can support the growth of the business. An accountant who is well-versed in your finances and knows exactly what your expenses are will help develop a business budget that is possible to maintain.
A budget will help you know exactly how much you have, how much you spend, and how much you need to accomplish your goals.
Preventing and Preparing for an Audit
Having an accountant on your team equals to minimizing your chances of being audited. If everything is perfect with your finances and there’s no “funny business” so to speak, there is no reason you have to go through an audit.
However, if it comes to that, your accountant will prepare you for it so that you avoid any serious consequences.
Growing Your Business
Your accountant is aware of your financial health and all its aspects including cash flow, inventory, profits, losses, etc. They have the insights and the skills needed to analyze this information in order to recognize opportunities for growth.
An accountant will advise you on the right path and prepare you for the next stage of your business.
In situations when businesses experience a sudden growth, this can cause several serious issues because business owners weren’t prepared for it. You might suddenly need more employees, more office space, you need to boost your productivity to meet the increasing demand, etc. Unfortunately, not being able to handle such sudden growth leads to failure.
An accountant can help you manage this growth accordingly without disrupting your day-to-day operations.