Why Your Small Business Needs To Hire An Accountant Now

Accountant vs Book keeperSmall business owners wear many hats, but “accountant” should never be one of them. Sure, everything may seem fine, but you could be inadvertently constraining your own success and profitability. What you don’t know could be costing you more money than you realize. Here are three reasons to hire an accountant now.

Bookkeeping Is Not Accounting

Depending on the size of your business, user-friendly software like QuickBooks is probably adequate for tracking payroll, business expenses, and invoices. Bookkeeping duties don’t eat up much time for small businesses with fewer than 30 employees. Often, the owner or a part-time bookkeeper is enough for managing the day-to-day tasks. While bookkeeping is great for helping you manage your business budget, it doesn’t take care of all your business’s financial needs.

A professional with a masters in accounting has the training to offer strategic advice to grow your business. Accountants produce in-depth documents, such as profit-and-loss statements, that allow you to better analyze your business practices. They can coach you about depreciation of your assets and re-structure your business for increased profitability. Additionally, accountants offer a wealth of expertise when negotiating credit or securing capital.

Your Financial Advisor Can’t Do It All

Many small business owners wisely have a financial advisor. These investment professionals are essential for business owners looking to build wealth, secure their future, and/or leave a profitable company to their children. However, financial advisors have a holistic approach and look at your small business as part of your life, not as a separate entity.

You can’t do what’s best for your business, or what’s best for you personally, if you think of yourself and your business as one. When tax time arrives, you’ll fare better if your business expenses and personal expenses are definitively separate. That means using business checking accounts and business credit cards for business-only expenses. This practice will also protect you if you are ever audited. It’s tough to argue for legitimate business expenses paid with a personal credit card.

You Don’t Know What You’re Missing

Taxes are usually the area where accountants have the most significant impact on a business. An accountant will take advantage of all the deductions to which you’re entitled, especially if you have a home office or use your own vehicle or mobile phone for business-related work. Accountants are in the business of decreasing your tax liability, but they will also make sure that you pay what you owe. If you pay too little, you could be subject to penalties and fees.

Additionally, accountants know new and changing tax laws. Maybe there are temporary programs that allow you to write off infrastructure improvements or new equipment. They’ll also recommend tax shelters and represent you if the IRS decides to audit.

Delaying hiring an accountant may seem like a cost-saving measure in the short term, but the long-term financial benefit and success of your business depends on the sound advice from a professional accountant. With someone else looking out for your financial well-being, you can get back to running the business that you love.

About Keerthika Singaravel

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