How Hiring an Accountant Could Save Your Business
According to the Small Business Administration (SBA), 20% of businesses fail in the first year. In addition to this statistic, only about half of small businesses survive pass the five-year mark and only 1 out of 3 will get to the 10-year mark. Some of the reasons that small businesses fail are: bad business plan, lack of financing and/or financial mistakes, and rapid expansion. As a business owner, how much time do you have in daily business operations to actually do the things an accountant could do for you?
An accountant can help you save your business through consultation in the following areas:
An Accountant Can Help You Get Your Business Off the Ground
Prior to grand opening, an accountant can help you put together a financial plan for your business and secure investments. Hiring an accountant this early on also avoids accruing financial errors. Furthermore, while in the start-up phase, an accountant can help you choose the best accounting system and the most efficient accounting software for your business/industry.
An Accountant Can Help You Mitigate the risk of Financial Mistakes
Accountants not only help you with your tax filings, accountants help businesses by preventing financial mistakes that could cost a business money. Some of the biggest accounting errors small businesses make are: overstating cashflow, incorrectly tracking income, incorrectly tracking expenses, forgetting to pay invoices, and/or missing the signs of fraud. If you’re not keeping accurate records, your accounting and bookkeeping become much less effective. When that happens, you leave your business vulnerable to losing money. Some of those errors can be as minimal as a late fee to as large as a tax fine set by the IRS due to errors or late filings that can also damage your business’ reputation. The right accounting professional will help you mitigate the risk of financial mistakes and will also save you time that you can dedicate to your business operations.
An Accountant Can Help You Grow Your Business
When a business expands too fast without research, strategy, and planning, the financial drain of the expansion can deteriorate the whole enterprise. While most decisions you make in business is a risk, you can take calculated risks by consulting with an accountant.
Furthermore, as your business grows, this growth may increase your chances of being audited and an accountant can help you prepare for a successful audit.
An Accountant Can Help You Avoid Bankruptcy
Good budgeting can keep your small business fiscally sound and safe from bankruptcy.
It’s important that business owners understand the common reasons why small businesses go bankrupt. Some of the most common reasons are:
Overextending finances – When your business spends more money than it brings in.
Too much debt – when you’re unable to pay back your business debt obligations. If you offered a personal guarantee, this may also lead to personal bankruptcy.
Mishandling money – when you’re not managing money appropriately and keeping your financial affairs in order, you could end up spending it too quickly or on the wrong things
Finally, one day you may decide to sell your business or retire. An accountant can assist you in maximizing the business value if you decide to sell. As for retirement, and accountant can advise you on the best retirement plans, pension plan(s), and/or investments. Need help saving your business? Want us to be part of your consulting team for your expansion? Have questions we can help you with? At CPA By Choice we are available to answer your questions, feel free to call us or send us a message.