www.taxprofessionals.com - TaxProfessionals.com
Posted by Unifirst Financial & Tax Consultant

Importance of Hiring An Accountant for Small Business

Importance of Hiring An Accountant for Small Business

According to the U.S. Small Business Administration, over 85% of small business managers are reading the financial dashboard or financial statements. If they are not well equipped to this job, steering the financial wheel could lead your business to the financial danger zone. It’s no wonder why 40% of small businesses fail to survive even for four years. Some reasoned that it could be due to the lack of start-up cash or unviable products and services. No, it is not. There are plenty of cash available and broad enough markets for the business to manage to find new and loyal customers. Small business largely fails due to mismanagement. You may start studying and learning the financial concept or hire a person to help you out from business plan to company formation, loan application to the government audit, and an accountant can make life easier for you at each step.
 
Business Start-Up Process


Accountants can help you in many ways when starting to create the foundation of a successful business. Determination of the best business structure for your current condition, to assist with the financial analysis in your business plan, selection of an accounting software, provide assistance in opening a business bank account, accounting procedures comply with government regulations and requirements, tracking daily business expenses, and keeping personal and business expenses separate. It is best to have the advice of a professional, they could help you choose the best health insurance policy for your employees that fit your budget and make sure that it complies with the federal and state employee rules and regulations to avoid fines.


Managing a successful small business is managing your cash. It is critical that you are knowledgeable enough to understand the accounting system to know the amount of cash you have in the bank each evening and if you can meet your expected expenses. A good accounting and record keeping system will help you do the reports that may cover the status of potential customers, sales made, sales made where customers have not yet paid, expense comparisons with the budget and same period last year, all sorts of tax reports, financial statements, and information needed to satisfy bank loan covenants. This is helpful is reading the daily actual results and for the projection of future business results.
 
Regular Business Operations


Once the business has taken off, maintaining the selected accounting system is a complex job and accountant can help you with that, such as:

  • To ensure that independent contractors are classified as such by the IRS.
  • Understanding the financial ins and outs of your business.
  • Company payroll and payment processes.
  • Preparation of the estimated tax payments during the year.
  • Determine when, and to whom, you should send W2 and 1099 forms.
  • Closing the financial books and create financial reports at the end of the year.
  • Compile and submit your taxes, financial reports and all necessary paperwork to the IRS.


Hiring an accountant does not mean that he must be an in-house, you may need their services at the crucial activity of the business such as when filing taxes. As the business grows, regulations also change and become complicated. This could also mean avoiding the possibility of paying fines for tax mistakes. It helps you save time and money.
 
When to Hire?

Sometimes business owners tend to be overworked, partly because they are hesitant in delegating the job to others. They want to be always in control or because of trust issues.


Hiring a financial professional is best when you are ready to delegate the tasks to someone. Not sharing of workload means overworked, stress and less time for some important things too. You can opt to hire an accountant to handle all of your financial activity, or you can choose to limit his or her hands-on activity, reducing the expense. You can also work with a bookkeeper to manage your books on a regular basis. A bookkeeper and an accountant can form a very efficient accounting team for your small business.


A bookkeeper is best in performing basic day-to-day activities. You can delegate tasks such as the gathering employee timesheets, submitting purchase-order invoices for you to pay, collecting customer payments, preparing bank deposit statements, and entering all the transaction information into your accounting and recordkeeping system.


Lastly, it is important you can recognize when you need to the help of a professional. Find an accountant who will help maintain the fiscal health of your business and not for their own benefit only.
 
 

Unifirst Financial & Tax Consultant
Contact Member