These days many people do their taxes and keep their own books using help from apps and the internet. And this often prompts the question: do I need an accountant for my small business? The answer is almost certainly: yes.
But why? Because the landscape of taxation and regulation constantly shifts, apps and YouTube videos can only take you so far. If you do things yourself, you may well lose out on tax breaks, miss costly errors, and fail to notice financial trends affecting your business.
Unless you went to business school for accounting, it’s better to hire a pro.
Why Do Small Businesses Need an Accountant?
Why hire a Certified Public Accountant your small business? The benefits of hiring an accountant for a small business are many.
You may think of an accountant as someone who simply does the books, but today’s CPAs are much more than that. They’re business specialists who focus on the numbers side of things. And they do crunch numbers – but they can also help you interpret them. They can assist you with budgets, profit-and-loss statements, financial planning, taxation, payroll, and even forensic accounting.
When to Hire an Accountant for a Small Business?
How do you know when to hire an accountant for your business? What if your mom-and-pop operation puts the “small” in small business? Do you still need one?
Below we’ll consider several instances where an accountant can prove vital.
Launching a Startup
Accountants are invaluable when beginning a new venture. They can help you decide what type of business entity your company should be – LLC, C corporation, or sole proprietorship, for example. They can start your books and budgets off right and make good decisions based on the financial information coming in, establishing a sound foundation for your new venture.
Setting Up a Business Plan
CPAs are very well-trained business professionals – they have to be to earn the right to call themselves CPAs. This wealth of knowledge can prove extremely useful when setting up a business plan. CPAs tend to be exacting individuals with an eye for detail, which can help start a company off on the right foot. They’re experts at risk assessment, cash-flow management, and budgets. They can also position you for an IPO if that’s part of your plans.
Setting Up Your Bookkeeping Software
Having a sound financial infrastructure is important for any business, and some of this comes down to the software used. A CPA can help you select the right bookkeeping program for your type of business. They know the ins and outs of accounting apps and can guide you through the process of integrating bookkeeping software with the rest of your business applications for maximum efficiency and data production.
Risk Assessment Advice
CPAs undergo thorough training in recognizing risk and exposure in financial and legal situations. They’re also held to the highest ethical standards. They bring an informed, outside eye that can see things you might miss. They can point out pitfalls and help you set up internal controls that will keep your business on a sure footing.
Financial reporting is where CPAs really shine. They can help you manage the books in a way that keeps the auditors happy – as well as generate usable data that will drive your company forward. CPAs can track, read, and interpret your financial situation, allowing you to make good business decisions.
Dealing with the Compliance and Tax Issues
Taxes and business regulations constantly change, and a CPA will keep your company in good stead. They not only prepare your taxes but also help you interpret tax and regulatory issues in ways that benefit your business. They can minimize your tax liability and ensure your business follows state and federal regulations. If your company is audited, they’ll navigate that process, too.
How Can a CPA Help Your Business?
There are many benefits of having an accountant for your business. Finance sits at the core of the business, and a good CPA will give your company a solid financial foundation. They can help you minimize expenses while maximizing your profits by providing services like the following.
You Save More Time
As a small business owner, your plate is plenty full. Hiring a CPA allows you to hand record-keeping and taxation issues off to a professional. Having well-kept books saves you time in so many ways. Bills and taxes get paid when they should. Financial information is always at the ready, so you make decisions quickly and efficiently. Your business stays ahead of regulations, rather than having to react to them. Audits go smoothly.
Businesses get audited. Creditors and investors want to know where their money is. Taxes and regulations cause innumerable headaches. Having a financial professional keeping your books, you can remove many of the stressors facing a small business. They’ll handle the onerous tasks like taxation and budgeting and crunch the numbers, so you don’t have to.
All Finance-Related Work Is Handled for You
If you’re like many entrepreneurs, you spend a large percentage of your time doing things like bookkeeping. According to a time-management survey by The Alternative Board, most small business owners devote only a third of their time working on their business. The rest is spent doing administrative tasks. Hiring a CPA lets you delegate a large portion of those tasks to someone who can do them better than you.
You Get Business Consulting and Advice
CPAs do so much more than simply keep the books. To earn those coveted initials after their name they have to have a deep education in business, and they bring executive skills that can propel a small business forward. These include interpreting financial data. Offering strategic planning. Assessing risk. Managing investments. Providing advice on tax and regulatory issues, allowing you to make the most of deductions and credits.
You Can See the Big Picture and Make Your Business Grow
A CPA brings a new eye to your business, and they can point out discrepancies and opportunities you might otherwise miss. Having all your financial data readily available makes it much easier to see trends and areas for growth. You’ll understand where your business has been and where it might go.
Can You Do Accounting on Your Own?
Can you do your own books? Technically, yes. Should you? Probably not. Unless you’re a Certified Public Accountant, you have better things to do with your time. Hiring a CPA allows you to manage the business rather than simply managing the books. And as we’ve shown above, they bring a wealth of additional skills that make your life easier.
Running a successful small business means making good decisions. Hiring a CPA is one of the best decisions you can make. Your books tell the story of your business, and you want someone who knows how to read them. How to go about finding a CPA for a small business? Simply click the link. You’ll be glad you did.