6 reasons why you need an accountant
Many business owners do it alone when it comes to managing their money. A recent report found that 53 percent of small business owners don’t use an accountant at all. And even more shocking, 27 percent of these respondents simply use pen and paper to keep track of their finances. Accountants do more than tax filing. They can take a comprehensive assessment of your finances and create a forecast through the year to keep your business at a healthy, prosperous state. Here are six reasons why it’s important to have an accountant for your business.
1. Get all your deductions
During tax season, most business owners start thinking about how they can maximize on their deductions. However, by the end of the year it is too late to make an impact on that. An accountant can support you by easily identifying these potential deductions throughout the year and advise you how to make strategic decisions for year-end deductions. Many business owners forget to track and account for items like depreciation, meals, charity, out-of-pocket expenses and home office space. Don’t leave money on the table!
2. Avoid an audit Another really compelling reason to hire an accountant is to avoid the dreaded audit. Unfortunately, most people think of an accountant as someone who can fix these issues after they have occurred. The important thing to remember is that an audit can easily be avoided if you get the guidance and counsel of an accountant year-round. There are many explanations as to why a business is audited: from too many mistakes on tax forms, to being too ‘charitable,’ to excessive write-offs. Think of an accountant as a long-term partner who is invested in your business and cares to keep it fiscally sound.
3. Save time and energy (and sanity!) Most entrepreneurs think that a tight budget means they won’t be able to afford hiring an accountant. But if you think about how much time and effort you spend on trying to manage your finances yourself, the benefits certainly outweigh the cost. As an entrepreneur, your focus should be on running your business. Investing in a professional accountant and engaging him or her as an ongoing tactical business advisor will assist you in maintaining that focus and simultaneously keep you on the road toward your business goals.
4. Make real-time decisions As a business owner, they often tell me that they wish they could easily calculate the potential consequences and implications of making a big office purchase or hiring more employees. Having an accountant as your financial advisor to help you with budgeting and monitoring cash flow on a steady basis will allow you to navigate any hurdles that occur in real time.
You should take a collaborative approach with your accountant, allowing you to make decisions together based on the latest data and also take advantage of a consultative relationship that will help you make business decisions when you need to make them.
5. Reporting automation and standardization
Accountant will keep track of income and expenses and can build reports needed for your day to day operations management and analysis.
6. Plan for the future Finally, one of the biggest benefits of hiring an accountant is getting advice on how to plan for the future. Together, you can pull reports from past months and examine the seasonality of your business. Doing this will help you determine the best time to buy inventory, and budget for big-ticket investments so that you can stay competitive and viable. As a business owner, you are most often preoccupied with the day-to-day operations of running your business. However, an accountant can take a step back and objectively look at the big picture to find the best way to support the longevity of your business.