Small business thrives on entrepreneurial spirit. You’re always looking for ways to grow, and you’re used to taking charge: no task is too great or too small. But you also know that success comes from delegating because the best business owners can’t do everything—and one thing most business owners can’t do is accounting.
Whether you’re just starting out, already established or looking to expand, investing in the right accountant is one of the most impactful business decisions you can make. We will go into more detail about the different kinds of accounting services and their costs, but first let’s dive into the reasons why you should engage an accountant from the get-go.
Your business plan is more likely to succeed
The business end of running a business can be overwhelming for most people. Things like understanding different legal structures, applying for loans, identifying operating costs and effectively managing money have sent more than a few would-be entrepreneurs running for the hills. Having an accountant on your side means you’ll have professional guidance throughout this process, so your numbers are accurate, your proposals are air tight and your presentations are polished. From lease negotiations to personnel requirements to ongoing reporting, your accountant can help you develop a 360-degree strategy to take your business from a dream to a reality.
You can earn more — and save more
If you own your own business, managing your tax exposure is critical, and you’ll be amazed at the difference an accountant can make. If you do your taxes yourself, the risk of error is high, and these errors can be costly and time-consuming.
In addition to mitigating these risks, your accountant will know how to maximize deductions to help you get the best return. They will also help you with compliance and tax laws, as well as records maintenance so you’re ready for an audit if it happens.
Aside from your taxes, your accountant can provide insight into how to grow your business through detailed financial analysis. For example, you could be losing money due to problems with inventory management. Your accountant can review your sales data to predict demand and recommend ways to cut down on storage costs. Together, you can create milestones for progress, build a financial safety net and bolster the strength of your business.
Help when things don’t go as expected
Life is rarely smooth sailing for the small business owner. Your accountant can help you identify problems in your business model and break down these problems into manageable action items. From dealing with unpaid invoices to managing debt and refinancing, your accountant will look at the numbers behind your business and develop a specific strategy to keep you moving in the right direction. An accountant can also help you adapt to market fluctuations, lapses in supply chain management and employee restructuring—all of which require the strong financial stewardship of an experienced accountant to help you weather the storm.
Many entrepreneurs thrive on the adrenaline that comes from facing new challenges, but this may reach a point where you’re putting yourself at risk.
If you’re a sole proprietor or small business owner, you may face challenges in the form of social isolation or a limited safety net. And passion for the job will only get you so far—one study from the Harvard Business Review found that entrepreneurs who reported “obsessive passion” for their jobs were at the highest risk of burnout.
An accountant can help you reduce stress in many different ways. First and foremost, they’ll file your taxes correctly and maximize your returns. They’ll also reduce the burden of handling your business finances, offer advice when you need it and give you more time to spend with friends and family so your time spent outside the office will be just as fulfilling as your time spent on the job.
Bookkeeper, Accountant, CPA — what’s the difference?
A bookkeeper documents daily financial transactions, helping you understand where you stand in the moment. In addition to making sure your records are in order, a bookkeeper can help you make better budgeting decisions and stay on track with your expenses. Come tax time, a bookkeeper can help reduce your workload by ensuring all your business transactions are accurately logged and organized.
But a bookkeeper isn’t equipped for every task. When it comes to understanding the big picture, you need an accountant to provide a skilled interpretation of the numbers. An accountant can provide strategic advice to move your business forward by creating revenue forecasts, strategies to manage cash flow and troubleshooting protocol for when things don’t go as expected. Furthermore, if you choose a Chartered Professional Accountant (CPA), you can be confident that you’re getting a top-tier strategic business expert with the education and experience to help you achieve your goals.
How much will it cost?
Accounting costs will vary based on your business model and size, and you’ll need to do some research in your specific area to learn about the standard rates. Your accountant may charge by the hour or accept a monthly retainer fee. When you’re searching for an accountant, don’t be afraid to shop around— candidates should be willing to meet you for a free consultation to see if they’re a good fit for your company culture and business needs. Just remember, your accountant is a valuable asset to your business and likely one of the best investments you’ll make.
Most successful small business owners will tell you an accountant is an absolute must. While you may feel the pinch in the beginning, having a professional accountant on board will help you stay on top of the business so you can focus on growing the company.
Expert advice, when you need it
Have questions? Let us connect you with the resources and advice you need to keep your small business financially healthy. Reach out to your business advisor, call us at 1-888-597-6083 or contact us online.