There is a term often heard in the industry, though not said by all, that is ‘small businesses don’t need an accountant or accounting’. Such inappropriate and unjust phrases and concepts not only belittles the importance of accounting but also hampers the business in the long run. Let’s have a look at why this myth is wrong.
Dedicated vs. shared responsibility
The businesses which do not have a dedicated accountant means somebody else has to do this work. Sometimes it is the manager and sometimes it is the business owner him/herself. When someone is not professional or not very skilled at something, the probability of making a mistake and taking more time to do it, and often not being able to do it at all, happens. In the corporate world, time is money. The more time spent not doing something productive as much can in terms be translated to monetary loss. It’s a meticulous task to make financial reports, managing books and recording transactions. One mistake can disrupt the whole calculation. It takes a lot of time and accuracy is to be considered. Therefore hiring an accountant and having someone dedicated to the job should be a must. Many people may consider hiring an accountant to be an apparent ‘loss’. However, reality says otherwise. The cost of hiring an accountant is far less than the cost of losing money due to miscalculation and also spending more time on accounting
Setting up a business properly
Putting into perspective the financial and identity-related questions that reflect the business itself, should be something that’s compliant and meaningful at the same time. No one knows better than an accountant that what should be the type of business be based on the activities and that will provide a guideline to set all financial activities as well as follow up on the compliance and regulations. Necessary resources like financial software, income and expense categories and other vitally important issues which lie at the core of the business need to be set early on to avoid mishaps and adjustments at a later time. That’s why an accountant is very much needed.
Preparing for an audit and fitness for other financial aspects
Any business should be prepared for an audit at any given time. An auditor needs to be guided through all the transaction, books, registers and financial records and that’s why an accountant can help by always keeping these documents and records prepared and up to date. As a result of which, the business representative in the finance side of things, the accountant will be able to help the auditor to see things through. He/she can answer the relevant questions, provide support and back the business up. An Accountant knows the details of the financial activities and having a dedicated person there to look after all accounting is quintessential. If the accountant is successful, the business is successful.
Supporting with expert advice
Numbers can be tedious and a whole bunch of numbers on a large scale can make a person become completely confused and forgetful. That’s why an experienced accountant can help a business in every step of the way. He/she knows what is there and what is not, and also the locations of the information. This can, in turn, be very helpful for fast recovery of data and also processing quantitative information for taking informed decisions at the management level. To develop strategies and formulate plans, insights from data and information is necessary and it is more important for small businesses. An expert accountant can help in all of these cases including setting up the business structure, analyse financial plans and more. An accountant has an eye to detail which can save a lot of cost that may go unnoticed.
Reducing Your Tax Bill
An accountant has up to date knowledge about everything tax and can determine in which categories the business can apply for a tax rebate or reduction. There are categories and intricate affairs related to the business and its core activities that can coil up to become complicated, especially when it comes to tax payment. Advice on the best way to comply with tax regulation and also saving money at the same time is something the accountant can help with.
It’s no secret that businesses incur many expenses. Some of the main expenses include contracted labour, employee salaries and quarterly tax payments. This not only includes federal and state taxes, but also sales taxes, which can quickly become complicated. Their expert advice will save a lot of penalty money and underpayment fine.
Account mistakes can be fatal
This particular issue doesn’t vary if the business is small or big, the risk is overwhelming. From simple, everyday mistakes building up to a larger amount to a silly or unnoticed mistake from carelessness can lead to potential problems. It may range from errors in the balance books to wrong estimation of taxes. If the damage done by these mistakes can’t be recovered in due time and it keeps on repeating, the whole business may likely to become a failure. Miscalculations in tax and failure to comply with necessaryfinancial regulations can also bring grave consequences.
Don’t underestimate the importance of having an accountant on your business, be it small or big. Every penny spent is important and should never be taken lightly. To protect and make the most use of your hard earned money and all the effort you give in on a daily basis, get an accountant, particularly an expert an experienced one to secure your business from many disasters.