The integrity of your small business depends on the transparency and accuracy portrayed in your financial books. Efficient bookkeeping and accounting are required for your business if you desire to excel at business-to-business (B2B) dealings rather than customer-to-business (C2B) activities only. So how does accounting help a small business owner like you?
First of all, it must be pointed out that the services of an accountant go beyond preparing your books for taxation purposes. Whether an accountant with a degree from a university or one with a certified professional license, an accountant is crucial for your business success. Here then are some of the ways that accounting can help small business owners:
Help With Initial Business Start-Up
Do you know that the services of an accountant are crucial to the success of any startup? An accountant can help you set up a foundational business system or structure that you can always build upon for several decades. These include determining the appropriate business structure – sole proprietorship, LLC, partnerships – analysis of the business plan, advice on best accounting software, help with opening and managing bank accounts, compliance with regulatory requirements, and tracking business expenditure among other things.
Regulatory And Reporting Compliance
One of the major benefits you derive from accountants is that they enable your business to adhere to government regulations. They work with the internal auditor or function as one to make your financial obligations compliant with regulatory requirements. They also ensure that your tax filings and W2 submissions are timely.
Assist With Obtaining Business Loans
Accountants can help generate company data that can be used for loan purposes. Most businesses require loans at some stage of their operations, and your accountant can determine, as well as defend your financial position to work out an external loan for you. The accounting officer can work out various financing options for your business as well as the best repayment options for business growth.
Review Contracts With Financial Implications
If your business is entering a new agreement with financial implications, your accountant can review the terms of the contract to ensure the financial implications favor you. According to Dewey Martin, a professor emeritus from Husson University’s School of Accounting, “their perspectives help their clients avoid negative consequences associated with cash management, financial planning, financial statements, and insurance.”
Periodic Analysis Of Financial Statements
A licensed accounting officer will analyze the financial statements of their clients and prepare periodic reports for information purposes. With a robust financial statement buoyed with up-to-date data, company executives can make informed decisions for investment, tax, and payroll functions using the periodic financial statements prepared by the accountant. The company’s financial outlook will assist the management to manage external financial relationships effectively.
Assist With Estate And Trust Planning
The bigger your business estate, the bigger your tax may get; meaning that it is possible you lose a significant portion of your assets to the government at your death if proper planning was not done. You can work with an accredited accountant to explore strategies where your wealth and businesses pass to your children as the right heirs, or to some desired charity – instead of the government – and with the little tax consequences.
Virtual CFO Services
If your business is not big enough yet to employ a full-time chief financial officer (CFO), you can outsource to a licensed accountant who will serve virtually. Using the latest accounting software, video conferencing, and online file-sharing portals, a virtual CFO can help your business with cash flow strategies, tax decisions, investment plans, payroll services, and bookkeeping seamlessly.
Achieve Operational Growth
An accounting officer is not only there to provide financial statistics, he is also there to provide growth indications for better expansion. “By providing business owners with people-focused financial metrics each month, such as operating profit per employee and average expense per employee, accountants can help small business owners manage their greatest asset — their workforce,” said Will Lopez, the chief accountant at Gusto.
Manage Business Succession Plans
Are you planning on handing over your company to your children at your demise? Your accountant can help make the process seamless. Many family businesses that have survived for centuries enjoyed a great succession plan that is influenced by insights from accountants. Your accounting officer can navigate the waters of passing your business to your family through financial strategies and legal maneuvers that work.
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