If you’re like most small business owners, you probably don’t like spending money on unnecessary expenses and you may find it difficult to justify the cost of hiring an accountant. You may have been doing your own personal taxes for years and figure you can handle your business’ books as well. After all, your business is still small and how hard can it be?
You probably won’t be surprised that, as an accounting firm, we think it’s important to hire the services of an accountant. Here’s why we think getting in a professional advisor at various stages of your business’ lifecycle can pay for itself many times over.
In the beginning
When starting out your business, an accountant can help put together your business plan. They are the experts at compiling cashflow plans and can help with adding financial projections and other reports. They can also give advice on what company structure will work best for your situation. There are advantages and disadvantages to being a sole trader verses a limited liability company, for instance, and an accountant can advise on what structure is best for you. An accountant can also provide advice on which accounting system is best for your need, help you get it up and running and provide training on how to use it.
Up and running
When you’re busy with the day-to-day running of your business, the last thing you have time for is trying to manage the books as well. Staying on top of creditors, managing costs and taking care of taxes are all things your accountant can help with, leaving you to focus on managing your business.
Dealing with the government
Having an accountant to handle your taxes is not the only time they can help when dealing with government bureaucracy. They can also complete and file relevant compliance documents, prepare annual statements of accounts, keep your company’s status updated in the government’s company register and maintain records of directors, among many other time-consuming requirements.
Being audited by the tax office can be very stressful, expensive and time-consuming. While it’s fairly unlikely you will be audited, it is best to get in early and hire an accountant before you are. They can give you advice on how to work within the audit process as well as ensure you don’t violate any tax laws.
As your business grows, so does the need for an accountant. Your accountant can help you secure finance for a business loan by compiling all of the documentation the bank needs to approve the loan. They can also help if you need new premises or to hire more staff by providing advice on payroll and other employee taxes, property tax, leasing arrangements and more. During this phase, your accountant can provide invaluable advice on financial strategies such as whether to lease or buy, where to save on costs and even advise on how to grow the business.
End of the road
When you’re ready to sell you business, an accountant is vital to ensure your business’ financial records are in order. They can also produce statements of accounts to show prospective buyers. They will speak to the buyer’s accountants during the due diligence process and can help structure your financial affairs to ensure you get the most money from the sale.
As you can see, accountants can come in pretty handy at any stage of the business lifecycle. Instead of being seen as an annoying expense, a good accountant can work with you as a trusted advisor to ensure your life is easier, leaving you to focus on doing what you love best, running your business.