Why do you need an accountant?
According to the 2019 Onpay Small Business Finance and HR Report, just 30 percent of small business owners work with accountants. This number means that a staggering 70 percent make their own financial statements and all the other related tasks. I wouldn’t be surprised if many do not even have accounting at all in their businesses. But why do you need an accountant?
Why does your business need an accountant?
An accountant can be your tax professional and help you save money on taxes, invest, and grow your business
It goes without saying that we all start businesses so that we earn money out of them. No one does not want that, except if yours is an NGO built to spend money on other causes. And, one way to grow your money in a business is to invest and expand your business. And, an accountant can help you, as a tax professional, to strategize and not pay all your profits to the taxman. An accountant will help you keep this money in the business, save it or invest it in your business. Sometimes, you can also use the extra money to help run your household.
It reminds me, I spoke to someone who needed my help just a few weeks ago. Her situation was really a sad one because she used to give the IRS more than $6,000 in taxes. When I assessed her taxes and worked on them, I realized that she was supposed to be paying $0 in taxes – yes, ZERO! But you know why she was paying all this amount? She was using TurboTax to file her taxes and had not hired an accountant until we met. Above the zero taxes I helped her with, she still gets a refund of $3,000.
Therefore, every business needs an accountant to help with tax planning and tax preparation. In fact, you don’t just need someone with a bachelor’s degree in accounting, but you need someone who is going to be your tax professional and help you save more than $500 each month like the lady in the above example.
An accountant can assess your finances and help you create an annual forecast to keep your business strong
The main output of accounting for any business are financial statements. Professionals in corporate accounting and financial analysts use these to assess the state of your business, including how likely it is to survive, or grow in the upcoming years. Before you get confused, an accountant, too, will create these financial statements for you and analyze them to measure your business.
Now, this process is very important because financial statements report the business activities and the financial performance of your company. It’s like a mini-book detailing everything about your sales, expenses, debt, assets, etc., in just a few pages. Information in this ‘mini-book’ is useful when you plan the next moves in your business. Without it, you are just walking in the dark – you don’t know whether you will step into a hole next, or not.
Financial statements consist of a balance sheet, the income statement, and the cash flow statement (CFS). Only a professional accountant can make you these.
A professional accountant offers more than just financial statements
Many small business owners struggle with operating income. Therefore, it makes sense to hire someone in the field of accounting who will help you with all financial operations. These include preparing financial statements, bookkeeping, and payroll. If you get an accountant who provides all these services, you would have saved the company a lot of money. It’s definitely different from hiring different people for all those functions.
An accountant can be a professional source of help
Running a business is scary, and sometimes exhausting. An accountant can offer business advice and help you grow your business even when times are hard. I know this personally as I have helped many businesses grow their sales. In other words, accountants make good business coaches, find yours today.
Another finding in the study by Onpay was that 28 percent of small businesses have been audited by or received a formal notice from the IRS. All this happens because of the lack of professional tax filing and unreliable financial statements, or poor accounting standards. Hiring an accountant solves these problems in a flash. Talk to me today. I am a part of the accounting profession. I have passionately helped thousands of businesses to save tens of thousands of dollars every year using tax strategies. Contact my office, get on my calendar today to start your own journey to financial freedom.
Other people have asked
1. What Does an Accountant Do? Role, Responsibilities, and Trends
Accountants do prepare and maintain important financial reports. They also help to prepare tax returns and ensure that taxes are paid properly and on time. Accountants also assess financial operations to recommend best-practices, identify issues and strategize solutions. They, in short, help organizations run efficiently. Accounting trends are now influenced by data analytics and shaped by the need for cybersecurity and transparency. As such, there is more emphasis on accounting transparent reporting and the use of software to monitor financial movements.
2. What Accountants and Auditors Do?
Auditors review companies’ and organizations’ accounts to guarantee their financial records’ validity and legality. They also provide guidance for companies to follow so that they don’t find themselves on the wrong side of the law.
3. What is Accounting?
Accounting is the process of summarizing, analyzing, and reporting financial transactions of an entity over a certain period.
4. What Are the Types of Accountants?
There are many types of accountants based on the role they play. But all of them have a basic accounting degree. These accountants include Certified Public Accountant (CPA), Enrolled Agent, Forensic Accountant, Auditor, General Accountant, Management Accountant, and Cost Accountant.