When you start your company, the last thing you want to do is spend an unnecessary amount of money. Most freelancers and start-up owners also regard accountants as an expensive luxury because of money constraints, assuming instead that they have the skills to fill out and file the necessary paperwork themselves.
However, it can often be an expensive mistake not to hire an accountant.
A good accountant offers a lot more than filling out and filing forms; they can provide professional advice and information, help you grow your business, stop you from running IRS, and save you thousands of dollars in taxes. Today, we look at the surprising benefits of accountants and how they can impact your small business.
- Saves You Time
With so many things to do, while keeping the family happy, it can be a struggle to find enough hours in the day. There is, however, one aspect of business management that is going to consume more time than most: Finance. These include both simple tasks — bookkeeping and recording receipts — and more complex tasks — tax returns and setting financial targets.
Your time, as a business owner, is your money. You buy time to focus on your company by hiring an accountant. A helpful rule of thumb is to compare your hourly rate with an accountant’s price. When you charge $100 an hour and your accountant charge a flat fee of $100 per month, that is a $100 well spent because it is unlikely you will be able to complete your monthly accounting tasks in a single hour.
Hiring an accountant for your small business allows you to delegate these time-consuming tasks and focus on what is important: growing your business and spending time with loved ones.
- Helps in Making Informed Decisions
A business owner is adept at performing multiple tasks at once–acting as hiring manager and one minute as marketing manager. Many days feel like a constant flow of decisions to be made. And one thing is clear when you look back on a day like this: the more information you had at the time, the better decisions you made. Having an accountant who has a grasp on the financial health of your business will mean having access to quality information when you need it.
Your accountant will help you track your expenses and help you keep your personal and business expenses separate. The IRS does not look kindly on business owners who pair the two together. Doing so may lead to an audit, and the burden of proof is on you to show that the questionable expenses are indeed related to business.
- Manages Cash Flow
Cash flow can make or break any business. Behind every healthy business is someone who keeps their hands on the cash-flow wheel. On the other hand, a timing misstep when it comes to cash flow has brought businesses large and small to their knees. An accountant knows what reports need analysing, when, and what the red flags are in this area.
- Handles Audits
In the case of an audit, the accountant will take the burden off your shoulders and direct you through the process as painlessly as possible. Getting an accountant who knows your records well and getting an accounting system in place that has been set up to comply with accounting standards, will bring you ahead of the curve if the IRS comes knocking.
It can be challenging to remain in compliance when tax rules change many times a year. An accountant who keeps your business in compliance can save you expensive fines and penalties as well as working hours.
- Pays Employees Properly
One area where busy business owners can often benefit from the experience of an accountant is payroll. Accountants often see the same mistakes when it comes to paying employees correctly, such as believing that overtime pay is not needed. A good accountant knows what to look for and will advise you on your specific situation. Ensuring that each employee is properly classified, as well as understanding when the exemption applies and when it does not; are examples of the skills on which you can rely when it comes to payroll challenges.
- Avoids Costly Mistakes
Hiring an accountant is the best way to ensure that you have the information you need. Mistakes such as non-compliance, missed deadlines, and cash shortfalls are much less likely to occur in your future if you employ the support and resources you need. The right accountant and the organized accounting system will save you time and money in the long run, allow you to put your resources in place and concentrate on what you do best.
- Manages Growth
Growing the business is the priority for all business owners. Your business is your baby, and that can affect your objectivity. Your accountant will take a dispassionate view of your business and can give you objective advice on the best ways to grow it. Even if your style is to make quick decisions and take the big risks, having an accountant on your team will be a huge asset – not to keep you from moving forward, but to help you work out the best path to greatest profitability.