As a new and inexperienced entrepreneur, you’re probably unaware of the mistakes you’re making in the beginning. You’re trying to juggle it all: manage employees, handle suppliers, payroll…and it seems to be working. Until you receive a hefty fine because you missed a tax deadline. Or your financial health deteriorates quickly and you have no idea why.
Or worse, you get audited.
Had you hired an accountant from the beginning, you would have avoided all these problems.
Here’s why it’s so important to have an accountant right away.
Small Business Failure Rate
A report shows that 53% of small businesses don’t have an accountant. And then again, a large percentage of small businesses fail within their first few years due to money management issues.
The top reasons why businesses fail are mostly related to poor money management skills including poor cash flow management, taking on too much debt, and trying to do everything on your own.
The moral of the story here is obvious. Even if you do have accounting skills, as a business owner, you can’t afford to do everything on your own and you shouldn’t have to. You’re bound to make a costly mistake sooner or later that could end your business. Having an accountant on your team early on will help avoid being part of the dreadful statistics.
An Accountant Can Help You Reduce Your Tax Bill
All business owners would like to take advantage of the available tax reliefs and avoid paying more than they have to, but they’re simply not so familiar with tax laws.
An accountant, on the other hand, knows all about taxes, deductions, and tax reliefs available to new businesses. They know what business expenses you can deduct to reduce your tax bill.
Tax software is a practical solution but a professional eye is still needed to oversee everything and make sure it’s error-free. An accountant can also advise you on a payment plan so that you avoid paying thousands of dollars at once by suggesting that you make small payments throughout the year. Most importantly, they will help you avoid paying more than you have to, which means more money left to invest in your business.
An Accountant Saves You Time (and Money)
Most small business owners think they can’t afford to hire an accountant so they try to manage everything alone. However, if you think about it, you’re not a professional accountant. And even if you were, you have so much on your mind as a business owner that you couldn’t focus on the details and so you are likely to make costly mistakes. Not to mention that you waste a lot of time, the time you could put to better use.
Therefore, the benefits of having an accountant far outweigh the cost of hiring them. You will have more time to focus on your business while an accounting professional takes care of the financial matters.
An Accountant Helps You Avoid an Audit
Most small business owners realize that they truly need the services of an experienced accountant after they’ve been audited. Up until that point, they believe there are more pressing areas of their business to invest in.
However, an audit can be avoided if you have someone to guide your financial decisions, keep your books perfectly balanced, and pay your taxes on time.
An Accountant Provides Financial Advice
Having an accountant early on your team is like having a partner who assists you in making financial decisions to grow your business and avoid potentially costly mistakes. This includes advice on various software tools you can use to improve your accounting such as expense tracking software.
Tracking all your business expenses is crucial for cash flow management and preparing for the tax season, so a good software tool is needed. Your accountant will help you find the right one.
An accounting company such as SCK Accountants can also assist you with things such as managing payroll and helping you decide on certain large investments in your business.
An Accountant Helps You Plan for the Future
A business owner is, naturally, too emotionally invested in their business so they often lack much-needed objectivity when it comes to planning. They make unnecessary purchases at the wrong time, make bad decisions, fail to prepare for emergencies, and jeopardize the future of their business.
The need for a solid business plan is essential, especially now amidst the ongoing coronavirus crisis that has disrupted businesses worldwide. The major benefit of having an accountant on your team from the beginning is to plan for the future together. Without guidance from a professional accountant, many businesses fail to plan properly and look at the big picture. An accountant has the skills to help you head in the right direction. Based on past reports, they can help you plan for a future, make the right decisions at the right time, and have a viable business.
Michael has been working in marketing for almost a decade and has worked with a huge range of clients, which has made him knowledgeable on many different subjects. He has recently rediscovered a passion for writing and hopes to make it a daily habit. You can read more of Michael’s work at Qeedle.