Growing A Small Businesses: The Challenges

An accountant is a good choice at all stages of your business’s growth. An accountant can help you with everything from a business plan to company creation, loan application, tax audit, and more.

This doesn’t necessarily mean that you need to hire an accountant on a full-time basis. Sometimes, just a few hours can suffice.

Small business owners often feel they cannot afford an accountant, or they try to do this in-house to try and save money. Business owners may think that they can’t afford an accountant. But, take a look at the time it would take to complete certain tasks (such as tax preparation) and consider whether this is a good use for their time.

Let’s take for example that it takes 10 hours just to complete your taxes. Your time is worth $100 per hour. It would cost you $1000 to complete your taxes by yourself. There’s always the chance that you will make mistakes, especially if your business is multi-tasking.

An accountant can help you with time-consuming tasks such as taxes. It’s likely that they will be less expensive than what you would have to pay. Not only will you have more time to generate revenue but also you’ll feel secure knowing that the expert will take care of all details.

What other times in the life of a small business might you need an accountant to assist you?

When you create a business plan, you will need to get advice

An accountant can help you add financial projections to your business plan if you include them in the process of writing it. This will allow you to create a business plan that is realistic, professional, and more likely for success. Get started with our business planning template.

You will get the best advice and financial knowledge from a professional early on. This could save you both time and money than hiring a professional later.

Advice about the legal structure of your company is important.

Different legal structures are not the same for all businesses. They are determined by many factors. Others might be limited companies, limited liability partnerships or corporations. Some could also be sole traders or proprietors. They can vary from country to country.

Before deciding on which type to choose, you should carefully examine each. You may be a sole trader, sole proprietor, or self-employed, and your invoice under your own name. You might be eligible to deduct some of your living expenses from tax if this is the case.

This could also mean that you could be personally held responsible for business-related obligations. The creditor can legally take your home or other property if your business defaults on a payment, does not pay a supplier, or is sued.

It’s very different from a limited liability company structure. The business’ liability is limited to its assets, not your personal responsibility, as the name implies. However, exceptions may apply in certain circumstances.

An accountant can help you understand the different legal structures and help you select the best one.

An accountant is needed to assist with finances

If you try to do your small business accounting on your own, it can quickly become complicated. An accountant can help you regain control over who owes money to you and how much.

It is possible to also measure a business’s key metrics including the ratio between total revenue and salaries. A good accountant can help you manage your payroll and produce graphs to show how it changes over time.

Cloud-based accounting software allows your accountant to quickly and easily share your company accounts with you. They can also create tables and charts that will allow you to quickly see the financial status of your company. This will allow you to monitor your company’s pulse and track important financial information such as cash flow.

When you are ready to delegate, hire an accountant

You love the freedom you have as a small business owner. You have the ability to set your own hours, create your business strategy, manage your workload, and decide your finances. It is a great and liberating feeling to be in control of everything.

Sometimes, it can prevent you from delegating. Sometimes business owners feel overwhelmed, partly because they are reluctant to let others help. It is possible to feel like no one knows your business as well, so nobody can manage any aspect of your business as well.

If you are unable to delegate, it can lead to feeling overwhelmed and stressed. You will eventually have to learn to let go and trust others to manage some aspects of your business, so you can take care of the rest.

It is a good idea to delegate your company’s financial affairs. It is important to find the right accountant for your company and be able to trust them with financial information. You will be able to focus on other aspects of the business once your finances are transferred to an accountant who is more knowledgeable than you.

The most successful business owners around the globe are adept at delegating work to the right people. Learn from them.

If you need to deal with the government, hire an accountant.

When you own your business, it can be overwhelming to deal with the government paperwork. It is common for business owners to hire an accountant to help them file their first tax return.  This can be a daunting task filled with questions and situations that a business owner is not familiar with.

They can help with much more than tax returns. They can also help you interact with the government in different ways.

An accountant who is good at what they do will perform the following activities:

  • Completion and filing of all required compliance and legal documents for your small business
  • Stay current with the most recent tax laws for your company
  • Prepare annual statements of accounts
  • Register your company in the government’s company register to keep your status current
  • Keep records of directors and administrative personnel
  • Record share/stock allocations, such as when a company is formed, when a partner leaves, or when a new partner joins.
  • Manage your payroll and ensure that all tax codes and payments for employees are correctly recorded.

Correct preparation of tax documents can save you money, and possibly more than what your accountant charges. A good accountant will be able to use their knowledge of tax legislation and law to help you save cash, raise capital and increase your expansion potential.

In the event that you need to be audited, hire an accountant!

Because there are so few small businesses and very few government auditors, it is statistically unlikely that your company will ever be audited. However, if this does happen it can be costly, stressful, and time-consuming.

It’s a good idea to get an accountant if you don’t have one. They can offer advice about how to proceed with the auditing process. They can help you ensure that you do not violate tax laws after the audit – as the government will almost certainly be looking.

It is better to hire an accountant before you need one, particularly if they offer audit insurance. If your company was required to respond to a review, investigation, or audit by tax authorities, then you will need to have audit insurance. A professional accountant offering audit insurance will not charge extra for the extensive work required during audit.

An audit trail is an integral part of good accounting software. This allows you and the government easier access to all transactions over time, and also who authorized them.

When you apply for a loan or overdraft for your business, an accountant is required.

Banks want to be sure they get their money back. Lending to small businesses has declined in many countries since the credit crunch. It is therefore important to have a solid business case before you apply for a loan.

Your chances of success can be improved by hiring an accountant. An accountant may be a factor in a bank’s favor. It shows that you care about your business. Your accountant will be able to present figures and facts that support your request for funding using good accounting software. Your bank will also have questions about revenue projections or expenses.

Your accountant can help you decide which loan you want and advise you on the terms and conditions of your bank.

Hire an accountant if your company is expanding.

Companies don’t always expand at the same rate. You might need to expand your business faster than you expected due to a new client or large project.

An accountant can assist you in managing during times when your company is growing fast, such as hiring staff or acquiring more office space. You can leave the details (payroll, employee taxes management, property tax and utility payments) to them, so you can focus on the larger picture of how your business is growing.

Accounting software can be used by an accountant to analyze your cash flow, stock management, and pricing. An accountant can provide financial analysis to help you grow your business. They can even assist in determining the right time to add a product or service to your portfolio.

Before you decide to sell your business, get advice from an accountant

You won’t be able to run your business for many years without an accountant. If you aren’t an accountant, it is worth looking into hiring one before you decide to sell.

An accountant will organize your financial records and create statements of accounts you can present to potential buyers. They can use high-quality accounting software to create tables and charts that will help you present your company in a positive light. During the due diligence process, they can talk to potential buyers’ accountants, which is often a legal requirement for any business being bought.

One of the most important things an accountant can do is help structure your financial affairs to maximize the value of your business when it sells. The amount you get after taxes will vary depending on how the sale is structured. A lump sum may be more tax-efficient than monthly payments spread over a number of years.

Each sale of a company is unique. A good accountant can help you achieve the best results when you sell your business.

Before you sign up for a franchise, consult an accountant.

A franchise is a popular way to start a business. This applies especially to areas like auto detailing, cosmetics supply, and lawn-mowing. A franchise allows you to be your own boss while the company supports you in brand marketing, product sales, and other important matters.

This can reduce some of the risks involved in starting a business. However, you’ll have less freedom in the marketplace and higher overheads because some of the income you earn will be paid to the franchisor’s parent company. The amount that you pay and keep in franchise contracts will vary.

For someone who is new to the business of running it, it can be difficult to determine whether it’s worth investing in a franchise. An accountant can help you with this. An accountant can help you determine your income potential after examining the franchise agreement.

Only you will decide if you want to purchase the franchise. You can make this decision more confidently if you have a good understanding of the financial situation.

Before you purchase a business, consult an accountant

While some people prefer to start a new business from scratch others prefer to purchase an existing one. Before buying an existing business, it is a good idea to consult an accountant. An accountant can review the financial statements of the company and determine if there are any problems.

They can also check whether assets, such as equipment, are fully owned, leased, or partially paid for.

A good idea is to consult a lawyer as well. Your accountant and your lawyer will work together to discover everything you need to know about the company that you are looking to purchase and run. This will ensure that you are getting all the services you have paid for.

Accounting professionals can assist you at every stage of your journey

As you can see accountants can be helpful at every stage of your business’ development. It doesn’t necessarily mean that you need to hire one. However, the right accountant should make your life easier so you can focus on what you enjoy doing.

Your business is your specialty. An accountant can handle the financial details. Cloud-based accounting software allows you to track your accountant’s activities and see the financial status of your company at a glance.