Bookkeeping and accounting begin the day you decide to start your business.
Whether you just started or have an operating business, you need an accountant to help your business grow and most importantly be profitable.
You can have a full or part time accountant (also called controller) on your staff as well as use a CPA firm for your year-end financial and tax reporting.
Businesses depend on accountants for much more than data entry, taxes and payroll.
An experienced accountant is a business guardian angel – an adviser, tax expert and strategic consultant all rolled into one.
Here are some of the reasons why a seasoned in-house accountant can help your business flourish and prosper:
They are Key to Financial Success
Updated and well-kept books can mean the difference between financial success and disaster for a company.
A year-old profit and loss can be used to file a tax return, but it is not timely enough to be of much use to management in daily operations.
Out of date bank balances, accounts receivable lists or bills owing are useless.
An in-house accountant will ensure all your business financial information and reporting is accurate, timely and accessible.
This provides the business owner with better cash flow planning, forecasting income and expenses, preparing for big purchases and future planning.
They Will Help You Manage Cash Flow
Cash is the fuel that keeps your business operating.
Without proper control of your cash flow, you will not be able to make critical decisions to run or grow your business.
Cash flow management is vital for your business, even a highly profitable business without sufficient cash will soon collapse.
An experienced accountant can help you better understand and manage your cash flow.
They Will Keep You Updated
Accurate and timely financial records give you information about income, expenses, gross margins, debt, and more.
A good accounting system makes it easier to compare the past—thus you can see if things are better or worse.
Tax deadlines, limits and amounts due have an annoying habit of changing on a regular basis.
Overlook one critical change, and you could end up greatly underestimating your next tax bill.
Using an accountant ensures that deadlines are met, and that you’re paying the least amount of tax at the right time.
Understanding how the tax and reporting system works can be a bit of a minefield—an accountant will help you tread carefully.
Save You Money
Think hiring an accountant/controller is expensive?
Think again.
An experienced accountant will be able to highlight areas where you could be saving money or lowering taxes such as claiming all of the expenses you’re entitled to, ensuring vendor bills are correct or getting sales tax returns compiled accurately.
This means that they could they cut your tax bill, even end up paying for themselves with cost savings and revenue ideas.
Hiring an in-house full or part time accountant may be cheaper than you think.
Reduce Workload & Save Time
An experienced accountant will help you reduce your workload.
Once your business takes off, you’ll need all your time to run day-to-day operations, rather than be occupied with government compliance, tax or bookkeeping.
As your business finances become more complex, you’ll almost certainly need a specialist.
Many people start a business doing what they know and love, and what they’ve always dreamt of doing.
For most people, this unrestrained enthusiasm doesn’t extend to spending hours on payroll, bookkeeping or filing government returns.
Accountants can help you focus your business on the really important things (making sales, being profitable), while they take care of the other financial stuff (payroll, paying bills, tax returns and payment).
They Know About New Stuff
For new solutions like online payroll and accounting software, they work with it every day and can recommend the best choice for your business, install it on your computer or in the cloud (online) and train your bookkeeper.
Plus, as changes to regulations and laws are always coming in, accountants will be one step ahead of business owners in their knowledge at all times because that’s their job
Experienced accountants will know the latest when it comes to working out what a business:
- should be paying in taxes and when
- what expenses are deductible
- ensuring that it stays compliant
- could take advantage of government loans and grants
They are Year-Round Business Advisers
It’s all too easy to think of accountants as really only coming to life at month end reporting or during tax return season.
Accountants possess the right skills, expertise and tools to serve as business advisers.
They carry a wealth of knowledge that comes from working with clients from all types of business.
An experienced accountant will have seen most of the problems and challenges that you may encounter.
They can provide an unbiased sounding board for your ideas, warn you of potential risks and alert you to opportunities.
As they are somewhat removed from the day to day running of your business, they can:
- use their experience to recommend solutions
- help recruit and train office staff
- offer a new perspective based on the bigger picture
- provide guidance on applying for business loans
- offer solutions to business problems
- suggest new business ideas
Works With Your Bookkeeper
Accounting involves preparing and analyzing financial reports, taxes, and other reports.
It’s similar to bookkeeping. Bookkeepers record the daily transactions. Accountants manage bookkeepers, install systems, prepare financial reports and file taxes.
Accountants have certain credentials and experience that bookkeepers may lack and thus can provide ongoing training and guidance.
Accountants typically deal with more complex systems, but both bookkeepers and accountants serve an essential role in your organization.
How Does This Work With Your CPA Firm?
You can find bookkeepers and accountants in every industry and every type of organization, profit and non-profit.
All businesses need to manage money, prepare financial reports and file taxes. They all need an overall accounting system and tax management.
You could have:
- A full or part time bookkeeper for day-to-day financial transactions
- A full or part time accountant/controller for timely financial reporting, budgeting, training staff, business consulting and installing systems
- A CPA firm that does specific assignments such as year end financial reporting and business income tax returns
These can be part time, full time, in house, contract or a variety of combinations that work best for your organization.
You can save on CPA fees (most expensive) by providing them with timely, complete and accurate financial information for year-end tax filings.
Good Accounting Helps You Avoid Audits
No organization wants to go through a tax audit.
Having sound accounting systems and processes helps keep your business in good legal standing.
A key role of an accountant is to handle the financial matters in compliance with various laws and regulations.
Sloppy record keeping, a bungling bookkeeper or a poor accounting system opens the door to the kinds of mistakes that catch the authority’s eye.
Mistakes can include messing up a tax form, claiming the wrong expenses or mixing up personal and business expenses.
Having a good accountant prevents mistakes and decreases the likelihood of an audit, especially for a small business.
_____________________________________
To take your business to the next level you need more than passion.
You need a trustworthy team of experienced people who are just as driven about your business as you are.
Hiring the right team members is one of the most important decisions you can make as an entrepreneur.
As a business owner a lot of your essential decisions will be dependent on your finances, so it’s imperative that you have an experienced accountant that will give you the required information on a timely basis and be there as a trusted advisor.
Creative Commons Attribution: Permission is granted to repost this article in its entirety with credit to Doug Hay & Associates and a clickable link back to this page.
