Being a small business owner is an immense and multifaceted job. Running a business involves so many different important and interconnected variables, and you’re responsible for all of them. Accountants can lighten your load by taking responsibility for a few of those variables.
But what can an accountant do to support you and your business? And how does an accountant’s work support the long-term growth and success of a business?
What Do Accountants Do?
There are many different kinds of accountants, and each accountant may specialize in a particular area. The field of accounting is so massive that specialized knowledge is almost essential. A degree in accounting or a license as a certified public accountant is not a guarantee that someone is a good accountant for your purposes.
There are two kinds of accountants that are most useful for small businesses. First are the public accountants. They often work independently and may contract with individuals and small businesses to assist with tax preparation and other financial planning.
Some accountants specialize in working with government agencies and navigating the particular financial and reporting policies regulating different organizations and businesses.
Then there is the management accountant. These might be the most critical financial consultants for small business accounting. Management accountants work with businesses to improve financial processes and records, produce reports and data, and advise planning and strategy.
How Can an Accountant Help a Small Business Grow?
Accountants can do incredible work improving business efficiency and saving money. Perhaps the most important benefit they provide, however, is better information. An accountant works to give business owners all of the information they need to make competent and efficient business decisions.
Here are a few of the specific services accountants provide:
Advise and Help Select a Business Entity
Many businesses work extensively with an accountant before officially registering their business. Every early decision you make will have a tremendous impact on your company’s future potential, so it’s crucial to get all the information you can get to make the right choices.
As you put together a business plan for launching your company, an accountant can help you consider your goals and choose the best entity for your small business.
Create and Maintain Cash Flow Projections
A healthy cash flow is essential for a healthy business. Accountants can help you to assess your cash flow and get in control.
To have the cash on hand when you need it, you need to know when and how that money flows in and out of your business. Cash flow statements and projections from a professional accountant studying your business give you up-to-the-minute data on your business.
Offer Financial Advice
There are few people better than an accountant well-versed in business finances to offer you advice. Before you take a leap and make a big purchase or launch a new marketing campaign, consult with an accountant who can analyze your options’ risks and benefits.
While you work with customers, accountants work with numbers. They can tell you if it’s not going to add up.
Help with Strategy
Management accountants are excellent planning partners when considering long-term business strategy. Whether you’re beginning your small business formation or you’re simply charting a new direction, you need an expert who can study market conditions and help you plot a well-informed and effective strategy for your company’s future.
You might consider working with an accounting firm also to improve the nuts and bolts of your company. Have a professional examine your bookkeeping and work processes and find ways to make improvements.
Invoice collection is an excellent place to start. Do you have to scramble every time you need to issue an invoice? Are your customers slow to make payments? A better invoice processing and collection system can streamline your work and get you paid on time.
A practiced accountant will also make applying for loans more accessible than ever. Your accountant can prepare and file the applications on your behalf.
And even if you fill out the application yourself, it’ll be easier without having to hunt down and gather the relevant financial information. With regular up-to-date financial statements from your accountant, you’ll have everything you need right at hand.
Debt can be crippling. Whether it’s a massive mortgage or simply a lot of small payments you owe to other firms, managing debt is hard. Even a collection of small payments can get out of control and undermine your business.
Accounting help lets you stay in control of your accounts payable and receivable. An accomplished accountant can also help you streamline or even lighten the load with small business debt consolidation.
Create a Budget
You need someone that knows the realities of your business to work with you on your budget. While some business owners may be tempted to draft a budget based on optimism around hoped-for returns, an accountant will prepare a budget based on the facts.
Before you complete a budget, you need an accountant that knows your business to help you carefully estimate profits and losses.
Many businesses turn to accountants to assist with regular financial reports. If you have to prepare financial statements for investments, you might improve your efficiency and the quality of the presentation with professional accounting help.
Having an accountant or a program present you with frequent financial reports will also give you a more comprehensive picture of your company’s health. This allows you to respond quickly and effectively to changing conditions.
Preparing and Filing Taxes
Of course, one of the most common and lucrative uses for a professional accountant is assistance during tax season. Hiring an accountant to prepare and file your small business tax return can increase your savings and decrease your audit risk, all while giving you peace of mind and extra time to focus on the rest of your business.
Work with an Accountant Now
A good accountant can work wonders for a small business. With improved information, planning, and efficiency, an accountant can give you the support you need to realize your vision and drive healthy long-term business growth.