Importance of hiring an accountant for small business
The Australian Bureau of Statistics (ABS) defines a small business as a business employing fewer than 20 people. Many small business owners don’t realize that a staggering 60% of Australian small businesses fail within the first 18 months. Typically, one of the main causes is poor financial management. Accounting is an essential tool when it comes to tracking your company’s finances. However, entrepreneurs who can run a business may not have the time, knowledge, or desire to oversee the business’s financial aspects. This always leads to poor financial management.
As a small business owner, you might be able to do accounting and manage bookkeeping at the initial stage of the business. However, hiring an accountant is an excellent idea once your business starts to grow. Accountants do more than tax filing. Accountants can make a comprehensive analysis of your finances and create a forecast throughout the year to keep your business in a healthy, prosperous state.
What is the role of an accountant in a small business?
An accountant can play a significant role in the success of your small business.
- Save you time and money
- Filing and completing the Tax return
- Cash flow management
- Provide Business advice
- Securing Financial support
- Setting up a business
- Look after financial records
You might think to it is better to eliminate the cost of hiring professional support until the enterprise grows up to a certain point. However, the service of an accountant is something all businesses should consider right from the start. Let’s take a look important roles of an accountant.
Save you time and money
As a business owner, you may have experience in bookkeeping, tax returns, or setting financial goals, doing your business accounts can be a challenging one. It’s time-consuming and distracts owners from focusing on other important areas of the business, such as business development, a marketing strategy, and sales growth. Hiring an accountant not only allows you to spend more time on strategic decision-making but also allows you to spend quality time with family and friends and creates a work-life balance.
A large number of small business owners think they won’t be able to afford to hire an accountant due to the tight budget. However if you consider the time and effort you spend on trying to manage your finances yourself and the possible errors you could incur during reporting, and related losses from poor financial decisions, the benefits certainly outweigh the cost.
Filing and completing the tax return
Every business needs to get ready for tax season. Filing and completing income tax returns is a difficult task for business owners. The tax bill can be minimized through various tax deductions. You need to have knowledge about those tax deductions to take advantage.
During the busy tax season, business owners are occasionally thinking about how they can maximize their tax deductions. However, the majority of them failed to make an impact on that due to a lack of concentration on that matter. An accountant can help you to identify these potential deductions throughout the year and advise you to make strategic decisions for year-end deductions.
Cash flow management
Cash is the heart of a business, and a business should have the cash to meet its expenses and repay the investors throughout the entire business operation. A business can run into trouble quickly if it does not have ready cash to spend, no matter how profitable it is on paper.
An Accountant can provide you with an accurate and complete cash flow forecast to secure your financial assistance on time. Further helps to identify ways to maintain uninterrupted cash flow. Proper cash flow management can improve your company’s profitability and make you more appealing to investors.
Providing business advice
An experienced accountant can act as a business consultant. Their wealth of experience helps to make your business successful from a financial standpoint. As a result of working with clients from all over the industries, an experienced accountant may have encountered most of the challenges and issues faced by the business. It helps them to predict and resolve the issues that may arise in the future for your business.
Setting goals and planning to achieve those goals helps businesses to grow rapidly. One of the great benefits of hiring an accountant is getting advice on how to plan for the future. Your accountant can shape your ideas, explore the potential opportunities and alter your ideas to minimize the risk. Accountants can analyze the impact of crucial decision making, assess the consequences of making a big office purchase, hire more employees, decide the best time to buy inventory, and allocate budget for big investments so that you can stay competitive and viable in the industry.
Securing financial support
Securing financial assistance from a bank, investors, and lenders is an important aspect of the business. However, fund providers are interested in the potential return on their investment. Your accountant’s support will be critical in making a convincing financial case to the appropriate parties. An accountant can provide steady cash flow forecasts and effective financial planning and strategy to improve your chances of securing funds.
Setting up a business
Starting a new business can be extremely daunting, especially if you don’t have a business plan that you believe in. Whether it’s your first time starting a new business or your 100th, it is always important to develop a . TASC Business Advisors and Consultants know what it takes to get your business off the ground and we’ll ensure your business strategy is focused with clear direction.
An accountant may also help you choose the proper legal structure for your business – sole trader or limited company, etc. All have various financial implications, so they can advise which one would be the best fit for your business setup. The right Accountant will have years of expertise in supporting small business owners in generating a professional and customized business plan with financial projections to assist them in achieving their goals.
Look after financial records
Financial records reflect the success of a business. Therefore, having proper financial records is essential. It helps the market analysts, and investors assess the company’s financial strength and earnings potential.
In conclusion: Selecting an accountant with the appropriate credentials and expertise working in your sector will be well worth the investment.
Accountants can provide a wealth of information to small business owners. When you hire an accountant for your business and then make sure to check their qualification and experience. When you work with the right accountant, then you will see that the accounting process has become easy and simple