There is so much to do when it comes to running a business successfully. As a business owner, you need to make crucial financial decisions, approve proposals, conduct meetings and manage your employees’ productivity. Among these numerous responsibilities, managing and maintaining accurate financial and accounting records is of critical importance. A business cannot function without a proper history of financial statements. You need to know where and how your money is being used. You also need this information to ensure tax compliance.
Apart from noting your financial records, you also need to keep tabs on your business’s day-to-day transactions. Since all of these tasks require a specific set of skills, it is best to hire a designated resource – a.k.a, an accountant – to ensure optimal usage of cash inflows and outflows. Whether you choose to hire an online accountant such as Wizz Accounting, or have an in-office accountant, hiring a professional to help oversee your finances has several benefits, and we’ve listed a few of them below.
To know your deductions
When it is tax season, companies are in disarray. They’re clamoring to gather all critical financial statements to prepare accurate documents for tax payments. An accountant can take this process a step further by identifying deductions enabling the company to save some bucks. Accountants have the skill, knowledge, and eye for looking at all possible ways the business can reduce its total payments in taxes. As a result, you get a chance to make strategic decisions to save money. In addition, you get to track expenses such as depreciation and office expenses that are rightfully yours.
Unfortunately, companies without an accountant often miss these opportunities and end up paying heaps in tax money. This is why hiring a business graduate who specializes in accounting can be extremely helpful. Alternatively, you can convince an existing employee to enroll in an MBA with accounting concentration online and skill-up for the role of the company’s accountant. This way, you’ll be creating more value for your employee and business.
To avoid unnecessary audits
No business likes the IRS visiting them and undergoing a scrutinizing audit. These professionals stop by to note all your ledgers and ask questions about tax and revenue gaps. However, an accountant can help you avoid such scrutiny. Of course, it is best to avoid financial malpractice and misreporting to prevent such a situation in the first place. Still, an accountant can also explain how your company’s funds can get the IRS’s attention. This could be from generous donations to unaccounted expenses. If you choose to ignore your accountant and proceed in an unorganized way, you may end up with a significant tax bill or legal penalty.
To track day-to-day expenses
Every business has several routine transactions that vary in monetary value and nature. This includes operational expenses, salaries, utility payments, accounts receivable and payable, etc. Having an accountant on board enables your business to keep proper track of all fixed and variable business costs. By doing so, you’ll be able to manage business finances better and ensure your ship doesn’t sink because of expenses that you are unaware of.
To make real-time decisions
The biggest challenge any business faces is making accurate real-time decisions. This could be investing in a product or hiring a new employee. If you are unaware of your business’s financial limitations while making such decisions, an accountant can help you out. They can use your cash flow and profit margins to evaluate what is feasible for your company. For example, suppose you want to invest in hiring new employees for the company. An accountant can evaluate your current financials, predict future salaries and estimate the RIO. This can inform you what the next ten years from a monetary perspective look like and if hiring is feasible. As a result, you get to make more informed decisions on how and where to lay your money.
To make future plans
Your business needs to have actionable long-term plans. Without these, your business will suffer stagnancy, and with time it will lose value. On the contrary, your accountant will help you pull quarterly reports and study the seasonal profits your business makes. This will help you decide when the best time to stock up is and when a new product needs an introduction. In addition, it also informs you if you need to pour resources into contemporary digital marketing tactics. When you can see numerical figures of what the next few years may look like, you’ll be able to make better long-term decisions. You may argue that now, with AI and machine learning, why is there a need to hire an accountant? While it’s true, these technological advancements generate reports. Still, you need someone to make sense of the information new technologies and data collection processes gather.
They understand the market
Accountants don’t work in a manner that keeps them away from other businesses. They have an idea of what your competition looks like and what their market worth is. They also know what significant investors are looking at in your competition. Information such as this is essential for your business. You can’t compete unless you know what you’re up against. Accountants can help you match numerical data and help you funnel resources in a productive direction.
You gain more perspective
An accountant can view your company from an objective angle. This is something you may struggle to do since you own the company. An objective angle helps you see what your company looks like to consumers. This can help you make necessary adjustments, such as improving your asset value and goodwill. Accountants may even add objectivity to branding elements such as the company logo. Since they see things beyond the conventional marketing frames, they can add a unique perspective to brand building and corporate image in the marketplace.
Accountants are essential for your business. After all, your finances are what keeps your business going. A good accountant can help you take your business to the next level. They manage all aspects of your business, from submitting tax forms to budgets. You also learn where you need to funnel your resources using their in-depth analysis of your company. Accountants can shoulder a significant chunk of your work, so you get time for yourself. When your finances have consistent monitoring, you can rest easy. Finally, an accountant prevents you from making financial mistakes that may cost you copious money. So, consider hiring an accountant now for a successful business.