Why Small Business Owners Need an Accountant?
If you’re starting or bootstrapping a small business on a tight budget, you’ve likely spent a little time attempting to discover where it’s possible to cut business expenses and do more on your own to stretch the money you have available.
An area you might think about doing it yourself rather than outsourcing it out is accounting. If you actually have a background in accounting and a strong knowledge of business finances, this might be an excellent place to cut expenses. But, if you lack the skills at managing the books of a company and are expected to learn as you go, you ought to think twice. Managing your very own accounting system improperly may hurt your company not just now, yet also in the long run.
Here is a breakdown of the tasks that accountants may do for the owner of a small business. Carefully assess this list, particularly if you still aren’t certain why an accountant might be a great resource to add to your small business staff.
As you start up a business, there are several actions you should take and systems you must establish to develop the basis for a successful business. The accountant will help by:
- Figuring out the best business structure for your circumstances.
- Helping with the financial analysis within your business plan.
- Offering advice on the kind of accounting software you might need.
- Offering help and advice on opening a company bank account.
- Being certain your accounting processes comply with government requirements and regulations.
- Offering advice about how to keep track of expenses during your day-to-day company activities.
- Going over the importance of keeping business and personal costs separate.
Routine Business Operations
As your company is off the ground, you’ll have to maintain your accounting system that the accountant helped you establish. A few specific actions the accountant might make to help you on a continuous basis include:
- Assisting in ensuring that your independent contractors are categorized as such by the ATO.
- Explaining all financial statements in order for you to recognize the ins and outs of your company.
- Overseeing business payment and payroll processes.
- Giving advice on estimated tax payments to make during the year.
- Figuring out to whom, and when you ought to send 1099 and W2 forms.
- Closing your books out and develop financial reports at the completion of the year.
- Submitting and compiling your financial reports, taxes, and all required paperwork to the ATO.
Business Growth Phase
When you’re prepared to expand your company, your accountant may be a critical resource which offers advice and assists you in managing the process. The accountant also can:
- Assist you in determining growth areas by offering insight on business financing, pricing, inventory management, and cash flow patterns.
- Offer advice on equipment and property purchase and leasing.
- Assist you in preventing getting audited by the ATO.
- Guide you and prepare you for an audit, if needed.
- Make financial forecasts in order for you to make better choices in your business.
- Cooperate with you to make a business budget which supports your company goals.
- Offer resources and advice to help you with the sale of your company.
Those are just a few of the ways that accountants will work with owners of small businesses. It’s possible to choose to hire an accountant for all your financial needs or opt for a combined approach, limiting her or his hands-on activity, which reduces the cost. For instance, it is possible to hire an accountant in the start-up stage and have her/him deal with your annual reporting yet work with a bookkeeper who manages the books on a routine basis.
For all your small business accounting needs contact Qi Wealth today!