Every small business owner needs to realize that a whopping eighty percent of all small businesses in the USA fail within their first year of inception. The reason for such a thing? Well, poor financial management. Despite such consequences, these small business owners still choose to go at it alone when managing their finances.
What’s more shocking? According to a recent report, around fifty-three percent of small businesses don’t hire an accounting professional at all. Twenty-seven percent of these businesses still use paper and pen to track their expenses.
While we shouldn’t conclude these small businesses will ultimately fail without an accountant, we cannot underestimate the wealth of expertise and knowledge one can provide them. These professionals do more than just file taxes. They help you assess your finances and allow your small business to remain in a prosperous and healthy financial state.
However, you might feel out of your comfort zone when you hire an outsider to handle your finances. But, partnering up with an accounting professional will set your small business up for success in the long haul. With that in mind, let us take a look at why your startup needs an accountant.
An accountant will help you make real-time decisions.
When making big purchases such as moving into a new office or hiring more employees, small business owners often want to know the implications and implications such decisions can have on their finances. So, hiring an accountant to serve as your financial advisor will allow you to monitor your cash flow and budget more accurately. In addition, doing so will also enable you to avoid any obstacles that occur in real-time.
Also, take a more collaborative approach with your accountant as it will allow you to make financial and organizational decisions based on the latest trends. That said, ensure that you hire one that has completed formal education, such as an online master of accounting, or has previous experience working with a business similar to yours.
An accountant helps you save time and effort.
Most small business owners think they cannot afford to hire an accounting professional when working with a tight budget. However, if you consider the amount of energy and time they spend on managing their finances, plus the damage that could occur when you try to handle your finances on your own, the benefits of hiring an accountant outweigh its cost.
As a business owner, your entire focus should be on running your company with an iron fist. It would be best if you were overseeing its day-to-day operations, rather than sitting on a computer the whole day and recording every expense on an excel sheet.
So, hiring an accountant and asking them to work as a tactical advisor will help you stay on the path towards entrepreneurial success.
An accountant will help you avoid the dreaded audit.
Another reason every small business should hire an accountant is to avoid a dreaded IRS audit. That said, most small business owners think that an accountant will get them out of a tricky situation after the audit has occurred. However, they should remember that an audit is easily avoidable in the first place if you have the counsel and guidance of a professional accountant throughout the year.
There can be many reasons why small businesses have to face audits which range from excessive writeoffs to tax filing mistakes to being too ‘charitable.’ So, when you hire an accountant, they will ensure that you don’t make such mistakes.
Moreover, they will act as a long-term partner who takes care of your business and keeps it fiscally sound year-round.
An accountant will help you with deductions.
The local and state government offer flexible deductions to business owners to fulfill their criteria. Due to this reason, most small business owners search for ways to maximize their deductions during the tax season. However, most of them usually fail without professional help as they don’t have the knowledge or expertise to take advantage of these deductions.
So, don’t leave money on the table and hire an accountant immediately! A professional accountant will help you identify these potential deductions and advise you on maximizing your deductions during the year-end. Furthermore, they will also help you keep track of things such as out-of-pocket expenses and depreciation.
An accountant will help you plan for the future.
Finally, one of the most important reasons to hire an accountant is that you’ll receive advice on planning your business’s future. For example, when partnering up with an accountant, you can examine previous monthly financial reports to identify your business’s seasonality. Doing such a thing will allow you to determine the best time to purchase inventory or budget for other significant investments such as expansion so that your business stays viable and competitive.
As a small business owner, you’ll find yourself preoccupied with your business’s daily operations to ensure it runs smoothly. That said, a professional accountant can step in and take an objective look at the bigger picture to search for ways to support your business’s longevity while planning for its future.
A small business owner’s life can be isolating, especially if they have a heap of invoices and receipts to plow through every day. However, it doesn’t have to be this way every day. Hiring an accountant with the expertise and skills to help you navigate financial hurdles and obstacles will set your small business up for success in both the short and long term.