Do you need an accountant for a small business? YES!
Individuals do not need to have their financial books and records by the law, but businesses are required to maintain proper financial records. Not hiring an accountant for your small business can be a costly mistake from a financial as well as tax perspective. The role of an accountant is crucial for any business as it helps the owner, investors, managers and stakeholders to evaluate and analyse the financial performance of the company. Accounting helps in gathering important information that offers a better understanding of the cost and earning patterns, liabilities and assets, profit and loss leading to more informed decisions and control processes. The main purpose of accounting is to record all financial transactions of a business to measure, identify and communicate the required economic data when necessary. Moreover, tax reporting agencies will ask every small business to keep a book at a minimum level that can help to track the income and expenditure.
Why Do I Need An Accountant For My Small Business?
The most common question that most small business owners have is “Do I need to hire an accountant for a small business?”. Accounting is an integral aspect of business. This means that it is a way to communicate financial information about business and economic growth for decision making and other purposes. So, the answer to the above-mentioned question is that it is very important to have an accountant even if you have a small business. The main advantages that you get when you hire an accountant for a small business are:
- Decision making:
Your accountant can be highly beneficial in making various decisions related to the financial aspects of running a business. It can help business owners develop policies that are efficient for increasing their revenue. For instance, the input of an accountant would be valuable while deciding the price of a product or a service that needs to be changed, the resources required and the financial opportunities.
- Recording transaction:
One of the primary roles of an accountant is to maintain a systematic and accurate record of all transactions within the company. These records are the backbone of the accounting system, which will give you a complete understanding of what is happening with the financial and economic side of your business. The owner should be able to retrieve and review all the transactions that have occurred when necessary.
- Business performance:
With your accountant’s report, small business owners can determine what course of action proved beneficial for them and how well that strategy is working for the company. The financial reports are a reliable source of measuring your performance so that it can be easier for the team to improve by adopting a variety of approaches to stand out amongst competitors.
- Financial positioning:
When you hire an accountant, he/she will provide you with a financial statement that reflects the progress of your business. It offers a better understanding of profits, losses, assets that you have accumulated, the amount of capital being invested and the funds that are used. Though, you can ask for the report whenever required, a report generated at the end of the accounting cycle is the ideal option.
One of the most common reasons why small businesses fail is their mismanagement of cash. This can be omitted by getting the help of an accountant who will assist you in determining the liquidity of your business, referring to the cash and other resources at your disposal to pay off any kinds of financial commitments. This data is very helpful in removing and reducing the risks of bankruptcy.
- Legal requirements:
As for the law, it is important for businesses to maintain an accurate financial record of all the transactions and share the reports with stakeholders, regulators and tax authorities. An authorised and legal accountant is the only professional who can provide precise financial statements and information that is required for indirect and direct tax filing purposes.
How can an accountant help with budgeting?
If you hold a basic understanding of accounting, recording your income and expenses is not that difficult. However, it is important to know that it takes a lot of your time and effort, which most business owners do not have. Business owners need to plan how they allocate resources such as labour, equipment, machinery, and more which is a major part of business management and budgeting. This can be valuable while coordinating various segments of the organisation for effectively running a business.
Budget planning is performed by an accountant who enables businesses to anticipate the needs and resources required. Budgeting and accounting can only be done by a professional as it involves detailed reporting and collection of company expenditure and its operations. Accountants can be essential for business owners to prepare the overall plan by evaluating the cost of their services as well as the company revenue and profit. The spreadsheets made by these experts track profits and expenses which helps business owners to focus on factual information. Many government organisations recommend companies to have a business plan for both long and short-term operations. This enables businesses to orient their business in a more profitable position, avoiding any kind of money loss.
The bottom line:
Businesses face challenges when it comes to budgeting funds. Accountants are professionals who are familiar with local and industry-related finance estimations. Their expertise and skills are incredibly important to make the business profitable. When you hire an accountant for a small business from RSJ Taxation, you will be able to focus on your budget and allow yourself to concentrate on the day-to-day business operations without thinking of managing and filing all transactions as this will be done by qualified experts in your area.
So if you’re wondering, “Should I hire an accountant for my small business?”, then yes, it is very important to have an accountant for a small business to be profitable as well as financially on point. To know more about their services, you can call our experts on 0433 545 610 or email us at firstname.lastname@example.org.
- Why is accounting important for small businesses?
Accounting enables small businesses to assess and measure their financial performance over a period of time. Budgeting and planning can be the best way to get an estimation of the resources, funds, assets and leverages of a business.
- Why should I hire an accountant?
An accountant handles the financial transitions of a business. These professionals can look after your employee tax management, payroll, property tax, utility payments and so on. This frees up more time for small business owners to focus on growing the brand and services.