As a business owner, you enjoy a great deal of freedom. You get to be your own boss while guiding your operation on the path to success. While it can be tempting to do it all yourself when you’re starting a business, there are certain tasks worth outsourcing, especially when it comes to the financial health of your business. Accounting is one task worth entrusting to a professional. Here’s how hiring an accounting consultancy can save you time, energy and money.
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Provide information about tax reporting requirements for different business entities.
When you’re first establishing your business, you may want to register it as a formal legal entity. An accountant can explain the state and federal tax implications of the different types of legal entities. For example, a limited liability company, or LLC, offers tax benefits and helps to protect your personal liability. The requirements for LLC formation vary between states, so check your local guidelines to see what’s needed to help keep you in compliance with the authorities.
Set up organized accounting, bookkeeping, and tax filing procedures.
Once you have your business established, an accountant can help you set up streamlined bookkeeping processes. This will help you stay on top of your bar’s money management, supporting your long-term success. Plus, you don’t want disorganized bookkeeping to result in errors or lost financial paperwork, which can cause big problems when tax filing season rolls around. Don’t underestimate the importance of being prepared for audits, which includes providing organized paperwork for all audited years.
Work with your accountant to organize payroll.
Payroll is one of the biggest stressors small business owners face. And manually tracking and administering payroll is a recipe for disaster given the potential for costly mistakes. This is why most SBOs turn to an accountant to help manage payroll. However, while your accountant will help keep the wheels turning, they’ll likely require you to set up payroll through a software system. Fortunately, this isn’t complicated; plus, a good payroll platform offers a wealth of tools for accounting that ensure accuracy and timeliness in addition to offering features like automation and direct deposit.
If you’re in a services business, you can also help your accountant stay organized by smoothing out the invoicing process. When you use an API to retrieve bank account balance for your clients, you can ensure you get paid promptly which will make it easier for your accountant to monitor your business’s cash flow.
Figure out what business costs you may be able to expense.
An accountant can further help you figure out what types of business expenses may qualify as tax write-offs. You may be able to deduct timber management and operating expenses, and more. An accountant can help make sure you are in compliance with write-off requirements, minimizing the chances of an Internal Revenue Service audit.
Get regular financial reporting to assess your business health.
An accountant can further provide information about your operation’s financial health. According to Harvard Business School, key paperwork like balance sheets and income statements show how your business is faring financially. You can use this info to make business decisions, like whether you’re really in a position to scale up. Mario Peshev reveals the importance of managing risk while scaling up. For example, you don’t want to spend more than you should to take steps like adding new employees.
Gain more time to focus on your core business competencies.
Finally, having an accountant handle bookkeeping, payroll, budgeting, accounting strategy, and tax preparation takes a burden off your shoulders. With someone else doing these duties, you don’t have to worry about them. We Work explains that this kind of outsourcing frees up your time to concentrate on other critical elements of running your business. You can then also do more of the tasks that you enjoy doing, which will ultimately help your business thrive. According to the University of Southern California, liking your job is a key to success.
As the above guide has made clear, an accountant can be a helpful addition to your operation. With the support of an experienced professional, you can focus on the parts of your business that you truly love.
Tina Martin | Guest Author
After leaving her early career in business administration, Tina Martin turned her professional efforts to building a career in sectors that inspired her. Now a personal fitness instructor and life coach, Tina has found that her life quickly changed for the better once she made the decision that her ideas matter and that she is the author of her own life story, and finally that she can, and should be, her own inspiration. She believes that “if we all took that same approach to life, we’d all be much happier, and the world would truly be a better place for it!”
Her website, www.ideaspired.com, is a side project in an effort to reach a wider audience and encourage people to put their dreams first. She says, ” if you want to truly be happy, be your own inspiration!