Whether you have a large existing corporation or you are just getting off the ground, you need to have a financial expert along for the ride. As a business owner or manager, you’ll want someone who you can turn to when making any purchases or business decisions that involve spending or making money. An accountant can help with all of these needs and aim your company along the right path.
By JORI HAMILTON
Many businesses decide to turn to accountants only when tax time comes around, but the reality is that you want someone there in the office you can bounce ideas off of throughout the year. Not only that, but an experienced accountant knows about common legal pitfalls and can prepare you accordingly. Below are many reasons to hire an accountant and why you may want one sooner than later.
Coping With Financial Emergencies
If you have been contemplating the need to hire a full-time accountant, you are not alone. The profession is growing by leaps and bounds, and experts predict that over 139,000 accounting-related jobs will need to be filled over the next seven years. While an accountant is essential for day-to-day operations, their services can also help your business survive through turbulent times.
For instance, the COVID-19 pandemic took just about every business owner by surprise and brought our economy to a halt. If a company did not have a surplus of funds or a plan in place on how to survive the unexpected, it might have had to close its doors. An accountant can help to mitigate unexpected issues by keeping a tight hold on your company finances all year long while making sure that no unnecessary funds are wasted. In a year like 2020, any company with an accountant on board had a fighting chance.
It is important to note that there are other methods you can use to watch your money if you absolutely cannot afford an accountant. At a minimum, you can invest in high-quality accounting software like Quickbooks or Freshbooks where you can enter in all expenses, profits, and forecasts for the future.
If that is still not possible, your company should at least use a high-interest savings account in which you save money during the course of the year for taxes or any unforeseen expenses that you didn’t plan to take on. It is important that the money you put in this type of account is not taken out unless for its intended purpose.
While an accountant can take on large projects, they can also help with day-to-day operations. A strong accountant is able to provide business owners with essential information that can influence business decisions at any given time.
A full-time accountant will be responsible for the organization necessary to manage all the necessary financial tools and forms that your business needs. Income statements, balance sheets, and cashflow forms will show in detail how much money you have at any given time and what funds can be spent in the future.
It is a wise idea to have an expert manage all that detailed information. When you have one person who understands how every dollar is being spent, they can be essential when an owner wants to make a big business move, like trying a new product line or hiring new workers for a large project.
And that is one of the biggest perks. As a company owner, you are the one who comes up with great ideas of how to help the business grow. You may not have the time to think about whether your great idea is financially feasible. By working with an accountant, you can make sound business decisions and see your company thrive.
A good accountant is especially important if you are starting a new business from the ground up. A finance professional can put an initial bookkeeping system in place that will set you up for success in the future. They can also help you determine how much you’re able to spend on starting costs. They’ll assist in determining pricing options for office space, employee hiring, and how you can make the most out of all of it. If limited funds prevent you from hiring a full-time accountant, then consider outsourcing to an accounting firm that can help you on a temporary basis when you need them.
Essential During Tax Time
If your business ever needs an accountant, it is during tax time. Businesses need to file any necessary documents, and these forms must be completed without error. Most importantly, you will want to take advantage of all the potential deductions so your company can save money and spend it where it really needs it. If you don’t know all of the ins and outs of the tax process, you will want to bring in a professional.
The beauty of an accountant is that they don’t see April come around and start stressing about what they need and what it will mean for their company. Instead, the finance team is working on this information all year round as they constantly complete paperwork to ensure that your business is ready to go well before the tax filing deadline.
While they dot every I and cross every T, they are also reducing your chances of being audited. There can be an endless number of reasons why your business might be audited, from having multiple errors on your documentation to passing a certain profit threshold. An accountant will know the rules set forth by the IRS and can navigate them, so while you may not be completely excused from a potential audit, you will greatly reduce your chances of seeing one.
Tax season or not, enough cannot be said about the importance of having an accountant to manage the paperwork that your business needs in order to stay strong and prosperous. An accountant can help you file annual financial reports throughout the year, so you know where your business stands. They can also prepare reports that tell you revenue by customer, so you can see how much money you are making during a specific time period, from which products, and from what customers, which allows you to better target your marketing efforts.
The waters of business can be choppy at times, and you need a professional who can ensure your company is prepared for any potential storm. Once you understand the advantages that a financial expert brings to your organization, you will see they are an essential piece of your evolving business strategy you cannot live without.
Jori Hamilton is an experienced writer residing in the Northwestern U.S. She covers a wide range of topics but takes a particular interest in covering topics related to business productivity, marketing strategies, and startup efficiency. To learn more about Jori, you can follow her on Twitter: @HamiltonJori