Most business owners do not realize that poor financial management is one of the reasons why businesses fail. According to Forbes, 80 percent of businesses fail within the U.S. during their initial 18 months due to mismanagement of finances.
Unfortunately, this happens when companies try to take matters into their own hands when it comes to money management. A report shows that 53 percent of small businesses do not use or hire an accountant. While it may be ok for some to survive without an accountant, it can have dire consequences in most cases.
An accountant does more than just filing your taxes. They can actually produce a comprehensive analysis of your company’s finances. Additionally, an accountant can also help create a forecast for the entire year to ensure the prosperous and healthy financial state of your business.
There is no denying that an accounting professional can offer a wide range of knowledge and expertise that can benefit you in many ways. Let us look at the most prominent reasons why you must hire an accountant.
8 Reasons to Hire an Accountant
While it may be daunting to let a person get in on the most intimate details of your company’s financial matter, hiring an accountant can be helpful for long-term success. Here are eight reasons why hiring an accountant can be beneficial for businesses of all types.
1. Avoiding Dreadful Audits
One of the most compelling reasons to hire an accountant is, they can help avoid the most dreaded activities known as audits.
There can be various reasons why your business might face an audit. These include mistakes on your tax forms, being too frivolous with write-offs. An accountant becomes your confidante and long-term partner and ensures that you are fiscally sound and stay compliant with regulations and documentation requirements.
2. Business Plan Support
Are you planning to start a brand new business or just opened your doors for business? Either way hiring an accountant can provide you with added support to put things together planning-wise and financially. For example, an accountant can help you figure out the following:
The financial advice from a specialist accountant will ensure that you make an educated decision. This will undoubtedly translate into profitability.
3. Boosting Your Efficiency
Most business owners think that hiring an accountant will be a burden on your budget. When in reality, having an accountant in your corner will help you save time and energy that you spend on trying to sort out your finances.
Now you can use the extra time to focus on more productive operations and activities of your business. This will boost your productivity, which outweighs the cost of hiring an accountant.
4. Help with Deductions
As the tax season arrives, your CPA is going to focus on finding ways to maximizing tax deductions. An accountant can support your business by perfecting the financials and help make strategic decisions to maximize year-end deductions.
5. In-House Financial Advice
Accountants are well-versed in finance, and by hiring them, you can have immediate access to this excellent source for any monetary advice. The best part is that you can actually hire an accountant with expertise in your business’s specific niche.
For example, you can hire an accountant specializing in the restaurant industry, construction, product manufacturing, retail management, etc. These specialist accountants can offer tailored financial advice to you based on their extensive experience in the industry.
Hiring an accountant prevents you from trial and error scenarios, and you can make financial decisions with confidence and assurance.
6. Making Informed Decisions
CEOs and business owners often wish if only they could adequately calculate any potential risks, implications, and consequences when making a big financial decision.
Whether you are buying an expensive piece of equipment or hiring additional employees, an accountant can help you budget and monitor the cash flow. An accountant will act as your financial advisor to ensure consistent cash flow allowing your company to navigate through any hurdles.
You must adopt a collaborative approach to work with your accountant. This will allow you to utilize the latest data analysis to make a decision with your accountant’s consultation.
One of the most significant benefits that you can reap by hiring an accountant is to get advice on future financial planning. Your accountant can pull past financial reports for any month or year and examine the financial standing of your business for a given period of time.
This exercise allows you to determine various factors such as:
This will allow you to prepare in advance and stay competitive during your busiest seasons. You can continue to stay busy dealing with other day-to-day operations of the company. On the other hand, your accountant can step back to look at the bigger picture and identify the best possible ways to support your company’s financial longevity.
As senior management of a company, you do not want to deal with a pile of invoices and receipts and forecast the future proceedings. Therefore, partnering with an accountant with expertise and skills will not only be your guide for a smooth financial sail but also set you up for long-lasting financial security.
8. Satisfied Workforce
Accountants for small businesses can also take on the responsibilities of payroll and setting up employees’ pensions.
Therefore, instead of you juggling around with these unproductive tasks, your accountant will ensure that your employees get their salaries on time with the correct tax deductions. A Reliable payroll keeps your employees happy, translating into loyalty and increased productivity.
While you may be able to do it yourself, there is a fair chance of error that may lead to fines and other consequences by authorities such as the Internal Revenue Services (IRS).
An accountant is more than just a person filing receipts and invoices and doing your taxes. In fact, you get a financial advisor, a source to make informed decisions, and a subject matter specialist all in one single employee. So, hiring an accountant is definitely worth the money it might cost you to get one on board.
If you are a business owner, you can hire an in-house accountant. On the other hand, you can have instant access to a team of accountants by hiring an accounting service provider with added perks.