Having been in the small business/entrepreneur space for many years and in various capacities, we have several tips for small businesses, but one of my biggest pieces of advice is to hire an accountant. It’s a simple solution to what otherwise could take you days or even weeks to do on your own – as a business owner or entrepreneur, do you have those days or weeks to spare? Probably not. And yes, you have to spend a little money, but we’re telling you… that bit of money is worth it in the long run.
Here are our top reasons to hire an accountant for your business based on our experience:
#1: Ensure You’re Starting on the Right Foot
If you are in the early stages of your business, hiring an accountant is a must. Hiring an accountant will ensure you have the right financial systems in place from day one so you can focus on growth and ultimately, success. To help you get started, an accountant will advise you on what invoicing/accounting software is best to use, how to track which expenses, what reports are important, and more. If you start this way, you won’t have to backtrack months or years down the road when you finally do invest in an accountant and realize you’ve been doing your numbers wrong. Talk about undoing a big mess.
#2: Help Track Your Numbers
This was lightly touched on in reason one, but finding a good accountant for your business means you’ll also have an understanding of what numbers to track and which reports you should keep an eye on. A good accountant will help you analyze these numbers/reports and help you set measurable goals in relation to them. Overall, you’ll have a better understanding of your business’ performance with the assistance of an accountant.
#3: Frees Up Your Time
We can’t stress this reason enough! As a small business owner or entrepreneur, your time is PRECIOUS and you only have so much of it. As the manager of your business, your time and energy should be focused on revenue generation and keeping your customers happy. If you were to try to figure out your taxes, it would take you quadruple the time it takes a trained accountant who specializes in your industry or in the small business arena.
#4: Handles Audits
In the event of an audit (hopefully this doesn’t happen to you, but you never know), your accountant will handle this and take on the burden. They will guide you through the process and should always make sure you are compliant with the IRS rules and regulations. Audits are obviously stressful, so having an accountant on your side can help tremendously if that time ever comes.
#5: Navigates & Understand Processes
This one ties in with reason #4, but because accountants are trained in their area, they know how to navigate the tax arena. They’ll know about things that you didn’t know and will ensure you are always compliant and following rules. As a small business owner/entrepreneur, you have too much on your plate to worry about the world of tax rules.
#6: Avoids Tax Mistakes
Accountants are also there to make sure you avoid any mistakes, some of which can be very costly. For instance, missing a tax filing deadline, experiencing a cash shortfall, and much more. They can also help you find areas where you can save. For instance, if you work out of your home you can claim your home office expenses and utilities. Your accountant will walk you through this and while avoiding mistakes, will also help you avoid spending more money in owed taxes by finding what you can claim and what you can’t.
#7: Helps You Make Informed Decisions
As your business expands, you may need to hire more staff members or invest more in marketing. Your accountant should help you make these decisions in an informed way. If you need a new staff member, they can walk you through how much you can afford to pay a new staff member. If you need to spend more on marketing, they’ll help you establish a marketing budget.
#8: Can Increase Income
All businesses – large, small or in-between – require some kind of cash flow to stay alive. An accountant can help you determine what that cash flow needs to look like and how to up it. This could be done in various ways such as helping you determine your rates, improve debt collections, assist with investments, and more. What’s wrong with a little more income, right?
When we were thinking about hiring an accountant for Sprout, these were the reasons that we weighed. Of course, freeing up our time was number one as that was what we valued. If you are a small business owner or entrepreneur, We guarantee at least a few reasons on this list resonate with you. No matter the industry or size of your business, we highly suggest it.