Once you decide to start a small business of your own, you have to ensure all of its financial records are accurate.
Unfortunately, being too frugal by trying to sort out your small business’s finances might most likely prove to be a costly mistake later and cause you to close shop.
So while it isn’t too late yet for your small business, you should observe if it already exhibits these six signs that it may be in need of an accountant who can manage its books better than you:
1. You don’t have the time to read up on accounting jargon.
Unless you’ve taken up a Bachelor’s Degree in Accountancy back in college, most – if not all – accounting terms might sound alien to you.
If you don’t know the difference between accounts receivable and accounts payable for example, you’ll most likely make a huge mess out of your financial records.
Since reading up on accounting jargon wasn’t part of your plan when you first started your small business, you’ll want to get an accountant instead so you won’t have to wrap your head around terms that you don’t see yourself using in daily conversation.
2. You spend too much time trying to maintain your small business’s financial records by yourself.
Even if you did take up a Bachelor’s Degree in Accountancy there’s times when being an owner has to take a higher priority over your bookkeeping.
In this case, you should be receptive enough to the idea of letting an accountant take over your small business’s books. Who knows, they might uncover some discrepancies in your financial records that you haven’t caught the first time.
Your small business would surely benefit with a pair of fresh eyes who can keep its finances in check more than you may be able to do.
3. You’ve discovered that your small business pays too much tax.
You already understand you’re under obligation to pay your taxes when starting a new small business.
But if you do so blindly, you may not realize that you’ve already given away some of your small business’s earnings due to overpaying your taxes.
You can avoid losing a substantial amount of your small business’s income by hiring an accountant who can estimate your taxes and file your tax returns for you.
4. Getting help with audits.
On the other hand, you may not be paying the right amount of taxes.
As a result, whichever agency of your government is in charge of tax collection might decide to do a random audit on your small business.
To avoid becoming charged with either tax fraud or evasion, you should get an accountant to double-check your financial records to ensure there’s no discrepancies in them when being audited.
This will save a lot of time and money long term.
5. Your small business’s expenditures are higher than the revenue it generates.
If you’re not keeping a your finances straight, you might find yourself spending some of the earnings on buying a luxury chair for your office or having a biometrics system set up at your lobby.
Before you know it, you might already find yourself lavishly spending on things that you believe your small business would greatly benefit from which can mean the beginning of the end for you as a budding entrepreneur.
To avoid racking up debt, you’ll need to set aside additional spending when it’s not needed. An accountant can help you with your finances and show you how much you’re making to how much you’re spending.
6. Your small business has experienced some growth.
Nothing’s more exciting than to watch your small business grow. But spend money on it too soon, and you might find yourself filing for bankruptcy the next day.
You’ll thus need an accountant by your side to help you come up with strategies on how to manage your small business’s growth without losing track of your finances.
If you have to get more employees to work for you, your accountant can advise you as to how many you should hire. In case all of your staff can’t fit any more in your current location, your accountant can also advise you as to how many branches of your small business you should open as well as which possible places are within your budget.
Despite an article from 2017 brashly proclaiming that the accounting industry is dead, small businesses like yours need the services of an accountant now more than ever.
Although there are numerous accountants that would meet the need of your business – you should consider hiring one who has worked with a financial planning services provider like Capstone.
When do you need to hire an accountant for your business?
- You don’t have the time to read up on accounting jargon.
- You spend too much time trying to maintain your small business’s financial records by yourself.
- You’ve discovered that your small business pays too much tax.
- Getting help with audits.
- Your small business’s expenditures are higher than the revenue it generates.
- Your small business has experienced some growth.