They can help in more ways than you think.
Small business owners can struggle to understand exactly what benefits an accountant will provide them with. This article explores the main areas where an accountant can help. It includes sections on reducing tax, staying legal and compliant, advising on software and protecting the health of a small business.
Running a small business can be tough — You need to make decisions about every aspect of your work: developing your products or services, marketing, advertising, customer service, financial management and lots more, often on a very limited budget.
Because of this, it’s easy to overlook some of the very valuable advice that an accountant could provide you with, and they’ll often save you a lot more money than you’ll spend on their services. Let’s explore some of the main ways that an accountant can help out your small business, including:
- Reducing the amount of tax you need to pay
- Making sure that you file everything that you need to
- Advising you on software and other areas
- Helping with the financial management of your business
We’ll discuss each of these in turn.
1. Reducing the amount of tax you need to pay
The main way that an accountant will save you money is by helping you to run your business in the most tax efficient way; they can help by:
- Advising you on the best structure for your business — Are you going to be a sole trader, be in a partnership, set yourself up as a company or something else? A good small business accountant will know the tax advantages and disadvantages of the main business types and what it means to your bank balance
- Letting you know what you can claim against tax — Tax laws can be complicated, so having an expert to help you out is essential. An accountant will tell you what you can and can’t claim, what’s reasonable, and what the tax service is likely to frown upon. The best accountants can save you hundreds by helping you to reduce your tax burden, using effective, legal measures
2. Making sure that you file everything that you need to
aperwork is the bane of every small business owner, and there are several filings every year that we need to make so that we stay compliant and don’t create problems for ourselves! An accountant will let you know exactly what you need to file, with whom and when. They can prepare and check through your paperwork to make sure everything is as it needs to be and make sure that you pay the tax you need to, on time.
3. Advising you on software and other areas
Bookkeeping, invoicing, bank account reconciliation and expenses often take up a great deal of time, but good software and advice can make things much easier.
- Advice on software — A small business accountant will be aware of lots of different types of accounting software and can advise you on the best type to use for your business. Modern accounting software, especially software that runs online are often very full featured and allow you to complete invoicing, expenses, payroll, profit / loss accounts and balance sheets quickly and easily
- Answering accounting questions — You’re certain to have questions about the best things to do to keep your business healthy, and your accountant will often have the answers to those questions. Whether it’s the best way to setup a new product line, invoicing queries, assets and capital, expenses or something else, these are their areas of expertise, so make use of their knowledge
4. Helping you with the financial management of your business
- Financial management, cashflow, what you own and what you owe — These terms can bring small business owners out in a cold sweat! Fortunately, your small business accountant can help you with the financial management of your business.
- Cashflow — This is one critical area for a business; it’s vital to have enough money in the bank to weather any times when money isn’t coming in regularly. Your accountant can help you understand how much money you and your business need to survive
- Profit, loss and balance sheets — Your accountant will look at your financial records and be able to quickly establish the health of your business and advise you accordingly; what’s performing well and what isn’t, where do you need to investigate further, what can you dispose of?
- Alerting you to warning signs — Ultimately, you want to stay in business. Your small business accountant can be a good early warning system, letting you know about potential problems and pitfalls and giving your ventures the best chance of success
Of course, there are lots of other areas where an accountant can really help your small business out, but they are well worth the money that you spend on their services. Find a good accountant, and you’ll wonder how you ever managed without one.
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I’m a professional freelance writer, creating content on business, finance, and technology. You can read more in my freelance writing portfolio. Financial editing and proofreading provided by Tara Foss.