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Business Tips

10 Reasons Why Entrepreneurs Need an Accountant

08/05/2020

Entrepreneurs and small business owners play a crucial role in a country’s economy. For example, France has almost 3 million SMEs employing more than 9 million people. Meanwhile, in the US, more than 99% of all businesses have around half of the country’s total workforce. However, every entrepreneur knows that their success has entailed lots of hard work and stress.

So what is causing this stress?

There may be a variety of causes, such as problems with cash flow or a failure to comply with regulations, which can result in closure.

Fortunately, there is one adviser you can rely on for your financial transactions and dealings – an accountant.

As an entrepreneur, you are probably accustomed to dealing with everything on your own, including the books. You may consider accountants to be another business expense, but actually they are well worth the investment. Among other things, they can reduce your workload and give you peace of mind.

Here’s how an accountant can benefit your business enterprise.

1.   Set up your accounts properly

Running a business is often a hectic endeavor and keeping up to date with the books is probably not a productive use of your precious time. If you cannot find the time or have little accounting experience or knowledge, you should employ an accountant who will be able to assist you in this regard. They can set up your accounts and help with other financial dealings, such as:

  • Minimizing the financial filing problems 
  • Maximizing your earning potential
  • Backtracking or cleaning your books

If you intend to switch to a different financial recording system, you will need the services of a finance professional. This will then allow you to focus on the operational and profitable aspects of your business.

2.   Check the accuracy of your numbers

The primary purpose of hiring an accountant is to ensure the accuracy of your financial records and reports. A well-trained eye is crucial, especially for documents that are required by law and tax regulations. 

A dependable financial expert can provide you with the means of measuring your business goals and tracking your progress. Remember, it is not easy managing something you cannot measure.

You can also use accounting software such as QuickBooks to help simplify your recording tasks. This accounting tool allows you to create financial reports with just a simple click of a mouse. It also enables you to catalog even the smallest details. However, it does take some time before you can master this software.

3.   Ensure you meet deadlines

According to Northants Accounting, companies and business owners often hire accountants to do their taxes. While you may be able to do the tax computations yourself, it is very easy to miss a deadline, especially if you are busy. If this does happen, there will be penalties or fines for late filing.

Accountants can take care of this paperwork and ensure that every tax deadline is met. They can also provide advice on how to automate some of your office routines.

4.   Enable you to make informed decisions

Entrepreneurs will be accustomed to assuming various roles within a business, and they will have no problem dealing with a customer and supplier at the same time. However, it is challenging to make informed decisions if you cannot process all the relevant information. For example, accurate financial data is meaningless if you don’t understand what impact it will have on your business. Fortunately, an accountant can help you evaluate your company’s financial information. They can also provide valuable and timely insights into the financial health of the business.

5.   Assist your end-of-calendar-year reporting

People are usually busy at year-end due to holidays and other business issues. Nevertheless, this is the time when most businesses balance their books before closing them for the year. This is often a tedious and frustrating process, especially if you do not update the books on a regular basis. To avoid any problems in this regard, you should consider hiring an accountant to check your books. They will be able to provide you with helpful suggestions, such as how to minimize your tax liabilities.

6.   Monitor your cash flow

Entrepreneurs will be well aware that the cash flow is the lifeblood of any business. If you don’t keep an eye on where the cash is going, your company may run out of money very quickly.

Accountants can help ensure your company has an adequate cash flow by analyzing your financial transactions and determining whether there are any troubling signs, such as:

  • Regular customers starting to delay payments
  • Your tax liabilities are higher than last year
  • The payment terms for one of your vendors need renegotiating

Any of these factors can significantly impact your cash flow. Fortunately, an accountant can help you avoid potential cash drains and increase your profits.

7.   Provide valuable assistance during audits

Audits, especially those involving taxation, can be a nerve-wracking experience. Accordingly, you need a reliable expert who will be able to help you with the process. In addition, as tax law tends to change over time, hiring an accountant who is well-informed about such regulations will be extremely beneficial. Ultimately, complying with all the current tax laws will help keep your business protected from fines and penalties.

8.   Obtain all the necessary information

Local laws and regulations relevant to your business can change and develop. If you have a busy schedule, it will not always be possible to keep up to date with these amendments. Fortunately, accountants are usually knowledgeable about the latest business laws. It, therefore, makes sense to employ an accountant who can monitor such changes while you focus on running your business.

9.   Manage your business and ensure long-term growth

The sudden growth and expansion of your business is not a guarantee of longevity. In order to ensure your business can manage such progression, you need to plan ahead. If a change in circumstance occurs, you should consider implementing an effective course of action, such as:

  • Adding or removing a product line
  • Expanding to a new place or opening new branches

These strategies, combined with an accountant’s expertise, will enable your business to grow and operate successfully in the long term.

10. Ensure your staff are paid properly

Employees are a vital resource for any business. As such, you need to ensure that they are paid well and on time. If you are having any issues concerning how to classify your employees or pay them overtime, an accountant can help you with this process.

Conclusion

In general, entrepreneurs like to focus on making their business prosper. However, with so much to do, maintaining the books is a task probably best left to a professional. An accountant will not just record your financial dealings and transactions, they will also provide valuable advice that will enable your business to grow. You can save precious company resources, money, and time by employing an accountant and allowing them to implement a suitable financial system. If you have a knowledgeable advisor you can rely on, it will be easier for you to focus on what you do best – running your company.

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