If you’re bootstrapping or starting a small company on a tight budget, you’ve probably spent some time figuring out how to cut expenses and do it on your own to stretch the funds you have.
Accounting is one place where you might want to do it yourself rather than hire anyone to do it for you. This could be a smart way to cut costs if you have an accounting experience and a sound knowledge of company finances. However, if you have no prior experience handling a business’s books and expect to learn as you go, you should reconsider. Incorrectly managing your accounting system will damage your company not only now, but also in the long run.
The following is a list of services that an accounting firms may provide to a small business owner. Examine the list thoroughly, particularly if you’re still not convinced that an accountant would be a good addition to your small business team.
The Start-Up Process
When you first start a company, you must take a number of steps and establish processes in order to lay the groundwork for a successful venture. An accountant will assist you by:
- Choosing the right business arrangement for your situation (sole proprietorship, LLC, company, alliance, etc.).
- Assisting in the business plan’s financial review.
- Advising on the type of accounting software you might need.
- Providing guidance and assistance with the establishment of a business bank account.
- Ascertaining that the accounting practices adhere to government rules and standards.
- Providing guidance on how to keep track of costs in your day-to-day company operations.
- The value of keeping personal and company expenses apart is explained.
Regular Business Operations
Once your company is up and running, you’ll need to keep up with the accounting system that your accountant set up for you. The following are some particular acts your accountant may take to help you on a regular basis:
- Assisting you in ensuring that the IRS classifies the independent contractors as such (rather than employees).
- Understanding the ins and outs of your company by explaining your financial statements.
- Managing the payroll and payment systems for the company.
- Providing guidance on when to make estimated tax payments during the year.
- Choosing when and to whom to give W2 and 1099 forms
- At the end of the year, close your books and generate financial reports.
- Putting together and filing your taxes, financial reports, and other necessary paperwork to the IRS.
Business Growth Stage
When you’re ready to expand your business, your accountant can be a valuable resource in providing guidance and assisting you with the process. In addition, an accountant can:
- By offering insight into cash flow trends, inventory management, pricing, and business funding, we will help you identify areas for expansion.
- Assist with the lease and procurement of real estate and equipment.
- Allow us to assist you in avoiding an IRS audit.
- If an audit is needed, we will prepare you for it and guide you through it.
- Create financial forecasts to help you make better business decisions.
- Work with you to develop a company budget that will help you achieve your objectives.
- Assist you with the selling of your company by providing advice and services.
These are only a few examples of how accountants can assist small business owners. You can employ an accountant to handle all of your financial transactions, or you can take a hybrid approach that reduces his or her hands-on involvement, lowering the cost. For example, you can employ an accountant to handle your annual reports during the startup process, but work with a bookkeeper to maintain your books on a daily basis. For your small business, a bookkeeper and an accountant will make an excellent accounting team.
When it comes to your business finances, the most important thing you can do is know when you need professional advice and then find an accounting firms that can help you preserve the company’s fiscal health.