Often, a small business owner sees an accountant as an unnecessary expense. These business owners many times take the accountant work on themselves and feel that they can get the job done. They spend countless hours working to fulfill the task that an accountant would provide, with little to show for it. Worse case scenario, they make crucial errors that an accountant would have caught. With all that said, let’s look at the reasons why a small business should always have an accountant.
What Type of Business Do You Run?
An accountant will work to ensure that your business is correctly set up from a legal standpoint. There are many things to consider when deciding if the business should be an LLC, a corporation or other options. An accountant can sort through all the information from the company and make this decision.
Having your business set up correctly will make filing taxes with the IRS easier, and you will be sure to have the correct things set up legally. Just having your business set up properly could save you a significant amount of money down the road from a legal and tax perspective.
How to Spend Your Time
Doing the work of both an accountant and a small business owner will occupy far too much time. It is easily the work of two people, which will cause the business owner not to be able to focus enough time on their business. Small business owners need to be focused on their business and clients or else they will fail. The time an accountant puts into a company can be full-time hours at some points, so trying to balance that along with running a business can be too much to handle.
As smart and knowledgeable as someone needs to be to own and run a business, there are specific qualifications that an accountant has that requires job-specific training. Without this training, mistakes can be made that could hurt the company. It is always a good idea to leave accountant work to the professionals for this reason. Things in the financial world also change and update regularly. An accountant will stay up to date on these changes.
The more time that a small business owner can spend working on their business, the better the business can run. Hiring an accountant will free up multiple hours per week, allowing the owner to focus solely on the runnings of their business and growing and improving that business every day.
Getting the Advice, You Need
A small business owner feels that they know everything there is to know about their business. In many cases that is true, but looking at the same numbers and the same books, day in and day out could quickly open up for human error. An accountant will provide a fresh set of eyes that are not tied to the overall success of the business to maintain the books. This fact alone can leave many business owners feeling much more comfortable. Accountants are also trained professionals who have seen the ups and downs of managing the financial records of a business. They can give sound, professional advice when things look good or bad. The more time they spend with your business allows them to give information based on history as well.
Save Money and Time
An accounts job is to take care of the finances of a business. They spend countless hours being trained but also stay up to date on changes to state and federal laws. They get paid to know anything that changes in the financial world. A small business owner does not have the time or the resources to see every change to every tax and financial law. Accountants also know what can be claimed and how for business purposes on taxes. A small business owner could easily not claim items on their taxes because they did not know they could. An accountant will catch those items and make sure that the owner gets properly reimbursed come tax time. All of these items will save you money, but also time. Not having to try to learn what has changed in the financial world and researching what something you can claim is, will give you valuable time back to put into your company.
What Could Not Having an Account Cost in the End?
The initial price of an accountant is what sometimes scares business owners away from obtaining their services. In the end, one accounting error made by a business owner trying to do everything themselves could easily cost more than what an accountant charges. An error made when it comes to taxes could be even more costly. A tax error could easily mean paying far more into the IRS than necessary, and many times that wrongly paid money will never be able to be received back.
What Happens if There is an Audit?
IRS audits are common and very stressful. There is a multitude of reasons an audit will happen, but being prepared whether there is something wrong or not is essential. Accountants are trained to handle audits and know exactly what will be asked for when the audit comes along. Being unprepared or not knowing what the IRS will be looking for could be costly. So costly, in fact, that businesses could be forced to shut down after an audit because they cannot pay the fines and amounts due with interest. An accountant will prepare financial records properly the first time and navigate through any audits with little to no harm put on the business itself.
A small business owner should never gamble when it comes to finances. Paying the money to hire a professional will pay for itself when it comes to proper bookkeeping and submitting the correct information to the IRS come tax time. The world of accounting is changing every day, and keeping up with those changes is something that a small business owner does not have the time for. Focusing on the business, and not guessing on accounting practices, should be the focus of every small business owner.
This article has been happily provided by the accountants at Ribeyre Chang Haylock. Big Thanks:
Accounting Coquitlam – Ribeyre Chang Haylock
2071 Kingsway Ave, Port Coquitlam, BC V3C 6N2