The financial arena of running a business can be trickier than any other – it may seem like a luxury for when you have better cash flow. But there are risks involved in trying to do your own accounting and bookkeeping. Taking a proactive approach to managing those risks sets you up on the right path. If not done properly, they can lead to needless stress and in the worst cases, fines and penalties. Simply put, it pays to consult an expert.
Not convinced yet? Here are five key considerations when deciding if you should invest in professional accounting support.
1. Initial Business Planning
Small businesses just starting their entrepreneurial journey are discovering the value of involving an accountant from the very beginning. Useful insights into key business indicators and target markets can help businesses become financially stronger and more responsive. This allows you to take advantage of new opportunities as they evolve.
2. Business Entity
Every business is unique, or it should be. And every structure, whether it’s a sole proprietorship, partnership or company, has different factors to consider with respect to liabilities and taxes. It’s essential you understand these legal business structures to ensure you make the right choice – with the greatest benefit – for your organization.
3. General Finances
Small business accounting can be overwhelming, particularly when self-managed in a growing business. Lack of control with invoicing, budgets or tax information results in lost revenue, productivity and possibly customers. It also creates a lot of stress. Professional accountants can recommend systems to keep you on track with a thorough overview of payroll, cash flow and other critical financial data.
4. Loans or Investment
Every business needs a sound business plan when it comes to applying for credit or seeking capital investment. Accounting services can provide invaluable support by reviewing loan terms and conditions to identify the best option.
A professional accounting presence tells the bank the business is serious about its finances. With reliable, knowledgeable support to organize and present facts and figures and answer questions, the funding application can be a more efficient, less stressful, process.
As businesses grow, the complexity and labour involved in compliance increases dramatically. Perhaps one of the most important services professional accountants provide is preparing and filing the required legal and compliance documents:
- Keep current with the latest tax laws and file your taxes
- Prepare annual financial statements
- Keep the company’s status updated in the government’s company register
- Maintain a current roster of all employees
- Handle payroll and ensure that all employees’ payments are recorded correctly
Accountants provide many more essential services than the ones listed here. From input on efficient ways to grow your business or the best time to introduce a new product to changes in structure or succession planning, they can often save heartache, headaches – and money.
Ultimately, reliable, common sense accounting knowledge provides small business owners with peace of mind about the state of their finances. So you can run and grow your business. Or spend more time with your family. Or hike to Everest Base Camp. What you do with that part is up to you.