Many people long to own their own business. Let’s face it, not all of us are meant to have bosses. If you’re one of those people and you’ve recently realized your dream, you’re likely trying to decide where to spend your money—and where to cut back. After all, it’s all about your bottom line.
Considering this is a numbers game, accounting is one area you don’t want to scrimp on. Even if you’re knowledgeable in this area, you’d likely be surprised by how much you don’t know about saving and maximizing your profits. Read on for more reasons about why you should hire an accountant for your business.
Your Accountant Will Set the Stage for Success
The start-up process could be overwhelming for even the most experienced of business owners. An accountant will help you by determining the best business structure (corporate partnership, LLC, sole proprietorship, etc.), assist you in opening your bank account and how to manage this, and will ensure your accounting procedures are in compliance with government regulations. Working with your company’s money is not the time you want to experiment with trial and error, and an accountant can start you off on the right foot.
Business Bookkeeping Will Free Up Your Time
As with launching your business well when it comes to your financials, you want to be able to maintain your books flawlessly over time. Outsourcing this to an accountant will help free your time to dedicate to other parts of the business. Your accountant can assist you with tax preparation and tax relief, which can become all the more complicated when you own your own business. He or she will help prevent you from getting audited but also help guide you through should you get audited. This person can also help with financial forecasting, how to price your products, how to prepare for your financial future, inventory management, and how to make better business decisions.
Accountants Hold You Accountable
It’s highly unlikely that you were able to buy your business without the help of stakeholders. As investors in your business, they will likely request regular updates on the financial success of your company. In addition, if the business grows quickly, your employees could ultimately become internal stakeholders in your company. Either way, these people will all want to see that your company is moving in a positive financial direction, and your accountant can help compile reports to show it.
Accountants Will Balance Your Output and Input
The simple math of a successful business? One that takes in more money than it’s putting out to run its day-to-day operations. Of course, your sales department (if you have one) will hopefully be successful in doing this, but your accountant will be able to monitor this. He or she can do this by analyzing your expenses on salaries, marketing efforts, daily operations, and more in comparison to your returns on your investment. The extra benefit of these reports is that an accountant will look at each expense while keeping in mind the IRS’s requirements. These kinds of analyses will provide you the information you need to make decisions on growing your company and, as such, they are invaluable. There is also no need for time-consuming meetings to discuss these reports either, as your accountant can easily share this information with you online.
Your Accountant Will Be Crucial When You Decide to Sell
Whether the sale of your business was the ultimate goal or not, there will likely come a time that you do part with the business. You’ll want to make as much money as quickly as possible while keeping the sale as uncomplicated as you can. This is obviously no easy feat and why an accountant will become your best friend during this process. Your accountant will help provide you with an objective number for what the company is worth. As this article by inDinero.com points out, this person “can generate a picture of your income over time and assign concrete value to the more fluid and variable aspects of your business: past earnings, cash flow, balance sheets, equity statements, and the company’s performance related to economic and market conditions at large…” He or she would also be able to uncover any liabilities as well, which you’ll want to bring to the surface before the sale takes place.
This article merely skims the surface when it comes to the many benefits of hiring an accountant for your business. Knowing that your bottom line is being watched by someone with vast financial knowledge will provide invaluable peace of mind.