21 Ways an Accountant Can Help a Small Business Owner
If you are or on a limited budget, you have probably spent some time trying to figure out where you can and do more on your own to stretch the funds you have available.
One area you may consider doing it yourself instead of hiring it out is accounting. If you have an accounting background and a solid understanding of business finances, then this may be a good place to cut costs. However, if you lack experience in managing the books of a business and expect to learn as you go, you should think twice. Managing your own accounting system incorrectly can hurt your business not only now, but also in the long-term.
Here is a rundown of the things an accountant can do for a small business owner. Review the list carefully, especially if you're still unsure why an accountant may be a good resource to add to your small business team.
The Start-Up Process
When you start a business, there are many actions you need to take and systems you need to set up to create the foundation for a successful business. Here are some ways an accountant can help:
- Determining the best (i.e., sole proprietorship, LLC, corporation, partnership) for your situation.
- Assisting with the financial analysis in your .
- Providing advice on the type of you may need.
- Providing advice and assistance on opening a business bank account.
- Making sure your accounting procedures comply with government regulations and requirements.
- Providing advice on how to track expenses during your daily business activities.
- Explaining the importance of keeping personal and business expenses separate.
Regular Business Operations
Once your business is off the ground, you will need to maintain the accounting system that your accountant helped you set up. Here are some specific actions your accountant may take to assist you on an ongoing basis:
- Help ensure that your are classified as such (and not employees) by the IRS.
- Explain your so you can understand the ins and outs of your business.
- Oversee company payroll and payment processes.
- Provide advice on estimated tax payments you should make during the year.
- Determine when, and to whom, you should send W2 and 1099 forms.
- and create financial reports at the end of the year.
- Compile and submit your taxes, financial reports and all necessary paperwork to the IRS.
Business Growth Stage
When you are ready to grow your business, your accountant can be an integral resource that provides advice and helps you manage the process. Here are some examples of what an accountant can do:
- Help you determine areas for growth by providing insight on cash flow patterns, inventory management, pricing, and business financing.
- Provide advice on property and equipment leasing and purchase.
- Help you prevent getting .
- Prepare you for and guide you through an audit, if necessary.
- Create so you can make better decisions in your business.
- Work with you to create a business budget that will support your .
- Provide advice and resources to assist you with the sale of your business
These are just some of the ways accountants can work with small business owners. You can opt to hire an accountant for all of your financial activity, or you can choose a combined approach that limits his or her hands-on activity, reducing the expense. For example, you can hire an accountant during the start-up phase, and have him/her handle your annual reporting, but work with a to manage your books on a regular basis. A can form a very efficient accounting team for your small business.
The most important thing you can do when it comes to your business finances is to recognize when you need to enlist the help of a professional, and then find an accountant who will help maintain the fiscal health of your business.