You have decided to start a small business with a limited budget. In such a case, it becomes necessary to find all possible ways to save money. How can you stretch your business investment fund? Which expenses can be cut without affecting the health of your business?
Accounting is one area where you can save money if you do it yourself. It can be a good way to save money if you understand business financial practices and have a background in the field of accounting. However, if you lack expertise and experience in account keeping, this is not the right course of action. In place of saving money, you may incur expenses in damages and claims. Poor financial record keeping will affect your business negatively. It will damage your future business prospects, and your brand reputation will suffer.
What are the advantages of hiring a professional accountant? Will this professional deliver on the promises? The following information will help you decide if you should go ahead and hire a professional accountant for your business.
How Does an Accountant Help an Entrepreneur Starting a New Business?
You have to take several actions when starting a new business. Some robust systems and setups should be established to ensure your business has a solid foundation. It will increase the prospects of your business venture succeeding. An accountant can help you in several ways when you are starting a business:
- Determine which business structure (partnership, corporation, LLC, or sole
- proprietorship) is best for you.
- Analyze your business plan from the perspective of an accountant.
- Help select the right accounting software based on your business needs.
- Help open a bank account for business.
- Make sure your accounting practices comply with government regulations.
- Guide you in tracking daily business expenses.
- Educate you on keeping business and personal accounts separate.
- Help with some types of regular business operations.
Once you start your business operations, keep using the same accounting system that your accountant set up for you. Your accountant may take some specific actions to assist you. These actions and guidance may include:
- Help you identify the independent contractors and avoid classifying them as
- Explain your business financial statements to you in simple terms.
- Manage your payment and payroll processes.
- Help determine the taxes applicable to your business.
- Determine the entities who should receive 1099 and W2 forms from you.
- Create financial reports and close your books at the year-end.
- Handle all paperwork related to the taxes, financial reports, and IRS.
Help at the Growth Stage
A professional accountant will become an integral part of your business. The professional will provide valuable services and guidance to keep your business accounts in order. The accountant will help you in the following ways during the growth stage of your business:
- Help you discover the possible growth areas by providing you insights into business financing, pricing, inventory management, and cash flow patterns.
- Advise on equipment and property purchase and leasing.
- Prevent IRS audit of your business.
- Help you when an audit is due.
- Create business financial forecasts that let you take better decisions.
- Help prepare the business budget that meets your business goals.
- Provide advice and support if you decide to sell your business.
These are some of the services accountants provide to the small business owners. You can hire an accountant to handle all financial activities or only specific tasks of your business. It all depends on your specific account and bookkeeping requirements. A certified accountant provides invaluable services at the time of starting your business. You can hand over your annual reporting, regular bookkeeping, and other accounting jobs to the accountant. It leaves you to focus on your core business. You avoid mistakes that new business owners often make when they try to handle their accounting jobs by self.
As a business owner, you should know when to seek the help of a professional accountant. Keep your financial records to comply with the tax and financial laws. Your loan and fund applications will elicit positive responses from the banks and investors if you have maintained your financial records properly.