Why should you hire an accountant for your business? A question many small business owners find themselves pondering.
Think about your previous workday. How did you spend your time? Did you spend the majority of your workday making money, or did you spend a large portion of your day on administrative, accounting, or marketing tasks that prevented you from growing your business?
Here are 6 reasons why you should hire an accountant for your small business:
1. You need a business plan
Many small businesses fail because they don’t have a business plan. If you are a start-up and need to write a business plan, or currently are in business and don’t have a business plan, an accountant can help you with the financial aspects of the plan.
Accountants can act as advisors and perform business reviews to provide vital information for key financial reports that your company will rely upon to make other important business decisions.
Accountants can assist with appraising the viability of future projects with gain and loss forecasts. The expertise of a professional accountant could be instrumental in preparing business proposals and plans that would grow your company, or assist to obtain financing to maintain operational cash flows.
Don’t fall for the unnecessary costs many small business owners incur and write a detailed business plan with the help of an accountant. A well-rounded accountant will partner with your business to look at all the data and help build a road map to your success.
2. You need a new perspective
The training to become an accountant involves much more than learning to juggle numbers. In fact, accounting is sometimes referred to as the language of business, because it is so entwined with running a successful business. A degree program in accounting includes plenty of business and analysis coursework that prepares aspiring accountants to transform a company’s raw data into useful information. The training prepares them to evaluate financial records to offer recommendations to small business owners. This can include suggestions for reducing costs, increasing revenues and maximizing profits.
Small business owners are generally so involved in running the day-to-day operations of their business that they may not be able to see the whole picture. Someone who is external from the business can provide a different perspective that may otherwise be missed. Meeting with an accountant would be like taking a step back, looking at the bigger picture and gaining a fresh perspective.
3. You need tax guidance
Tax assistance that qualified accountants can offer is two-fold. Accountants are typically up-to-date on current tax legislation and have the appropriate tax knowledge for small businesses to aid in tax planning strategies. They should also guide your business in matters of tax compliance, working to ensure that you are obeying all tax laws and meeting all necessary filing obligations. Accountants also know about various tax breaks as they occur so that you may potentially receive the most value on the preparation of your tax returns. In addition, your accountant can be an invaluable ally in your business’ interactions with the Canada Revenue Agency.
4. You may need referrals
Don’t underestimate how valuable it is to receive guidance from someone who has insight and knowledge across hundreds of businesses and various industries. Accountants get to see the financial information of many businesses across a variety of industries, and have direct insight to the pros and cons that drive success. In addition, because of the respect they receive in the business community, accountants could provide valuable networking contacts and referrals that would organically grow your business.
5. You need to free up your time
Regardless of how new or established your business is, owners across the board struggle to find the right balance between work and personal demands.
I bet when you dreamed about being a small business owner, you probably visualized choosing your own work hours, working on things you truly care about, and most importantly, looking forward to going to work. You probably didn’t think about being huddled in a dimly lit corner of your office during the early hours of the morning trying to figure out your accounting.
Efficient small business owners know that they need to delegate their work to other people. If you delegate accounting to professionals, it saves you time to do what you do best: sell, market and grow your business.
6. You may need legal advice
To incorporate or not to incorporate? Your small business could have a variety of different legal structures with different, confusing definitions. Luckily, you are not alone. You could get help with your legal structure by hiring an accountant.
So how do these structures influence your business? Well, the different structures affect the amount of paperwork your business is required to do, the personal liability you face and your ability to raise money. They also impact how effectively you could take advantage of tax deferral techniques. If you choose a structure that is wrong for your business, you could be causing yourself a lot of pain down the line. For example, if you choose to do business as a sole proprietor and your business fails to pay a supplier, defaults on a debt or loses a lawsuit, the creditor could legally come after your personal possessions such as your house.
Those are just a few of the many benefits you could receive from engaging the expertise of an accountant for your small business. Accountants don’t just crunch numbers, they provide worthwhile and essential tax and business advice that is critical to the success of your company.
If you have been thinking about talking to an accountant, let us know how we can help you. Please feel free to contact us to schedule a consultation at 780-488-4011 or info@schwancpa.ca.
