Accounting tips for small businesses: Why do you need an Accountant?
An accountant’s job is to work on a company or individual finances. The finances include all transactions in, and out of the company. On the other hand, businesses operate under country laws. Therefore, for things to work out, they follow rules set by their country of registration. And, we call this compliance. If a company is not compliant, whatsoever, it runs into problems. We will highlight some of them in this article.
Therefore, considering the above, I wrote this article because I want small businesses to understand something. I want them to know that they require an accountant in place for the sake of looking after all the small details of their finances, as well as to keep their businesses compliant with the laws.
Why an Accountant?
After several hours of sharing accounting tips for small businesses, I realized that many small businesses don’t realize the need for accounting. They don’t realize how much vulnerable they are without this.
Once again, I feel like I should underscore what all the accounting talk entails. This is more on knowing your numbers as an entrepreneur. And, your numbers are sales, expenses, and anything that has to do with the flow of money in, and out of your business. They also include what’s on your CRM book, meaning the number of clients you have. And, it means the minutes you spend on a phone call, and how much you travel to meet clients. All these things got to be budgeted for, and thus make up your numbers.
Therefore, it is evident that numbers represent the bloodline of your business. If they are not well looked after, of course by a professional accountant, your business stops ‘living’. In other words, you will have to close shop. So, you simply need an accountant so that your business keeps on going, literally.
I have realized also, that most people start their business well, but end up screwing up. How do they manage to do that? Well, what starts off as a lucrative adventure, when its records are not kept, and traced, dies a natural death. That’s what happens to many entrepreneurs. Entrepreneurship is one thing, and accounting is another thing. When you think of it, many people take comfort in their ‘awesome’ ideas, and take time to brag. But, what they don’t realize is, without proper accounting, their idea can easily get out of control. When it happens this way, losses follow, and eventually the business shuts down. We do not want that, and I want to help you understand that you need a real accountant.
You need accounting for different stages of your business. There is the startup phase, growth, maturity, and transfer. You ought to know why you need accounting, and an accountant to start your business. This gives you room for a proper take off with your small business. As a small business owner, you need the numbers.
During your growth phase, you need accounting to take your business to the next level. Lastly, when you want to pass on your legacy to children, you need an accountant too. Accountants make sure that all the numbers, and the little details that matter is all accounted for. It surely does not result in mistakes, even when transferring your legacy to children.
Thus, nothing should make you think that you don’t need your numbers, because you do.
So, why do the small businesses fail to grow, and eventually shut down in their numbers? When it’s time to grow the business, it just won’t happen because they will not be doing their accounting well, and professionally. Your small business just doesn’t need a tax practitioner who comes in from time to time. It requires a real, full-time accountant to look after your finances and compliance issues.
Three reasons why you need an accountant
1. So you won’t have to do all the work.
Hiring an accountant makes you forget all about the laws and everything else. It helps you to focus on the real business, and how you can get more clients. Imagine trying to do your accounting books at the same time when you have to be calling new clients? It just won’t work, simple! Offload all this accounting hard work to professional accountants, and let them work full-time in, or, on your business.
2. So that you can understand the intricacies involved with your business.
These involve what documents are you supposed to be signing, and in which areas are you to stay compliant? Compliance is a key function of every business, especially when operating in heavily regulated industries like Finance, and Healthcare. And, when I mention it, I mean compliance with government arms that regulate business. Things such as tax filing, and accounting reporting standards. When these are not followed, consequences usually follow through.
Such consequences include the fact that you cannot get awarded any government contract if your business is not compliant. Or, you may be fined a hefty amount just for that alone. An example of a hefty fine was when Deutsche Bank was fined $203.8 million in 2017 for the lack of customer due diligence in the UK. All such fines can be avoided if an accountant is always in place to check all documents.
Therefore, get compliant, do not procrastinate. There is always a relationship between the money that you earn, and how compliant you are, or how much you postpone vital appointments, like an accountant. If you are non-compliant and are in the habit of postponing vital decisions, then your earnings are at a huge downside risk.
3. So that you understand the value of having your own personal accountant, be successful and live a good business life.
Besides all the above, you need an accountant to increase your level of satisfaction with life. Just imagine having to focus only on building your business while offloading all the hard work to your accountant? Life will be so good. You won’t have to worry about recording every sale, or missing out on paying a business loan. Your accountant will be there to make sure everything flows smoothly.