Maintaining accurate records in accounting books is crucial for small businesses to measure their financial performance. Proper accounting is also vital for complying with the relevant laws and dealing with legal authorities. As a small business owner, you need to wear multiple hats and must take care of various functions like marketing, finance, administration, etc.
This article specifically deals with accounting. You can either hire a good accountant or outsource your accounting functions to an accounting firm. For many small business owners, hiring an accounting firm is the best option as there’s no need to deal with an employee and the legal aspects of hiring an employee.
How Can Accounting Firms Help Small Businesses?
Most small business owners have a misconception that accounting firms can only help maintain their financial records. However, they often fail to see the broader picture. Here are nine ways how an accounting firm can help your small business to flourish:
1. Helps With Tax Planning
No one can avoid taxes. Avoiding taxes will only make your businesses get into unwanted legal issues. It’s best if you pay your taxes and file your returns as per the legal requirements. However, dealing with taxes isn’t as easy as you may think.
Tax Planning is exceptionally crucial and difficult. If you appropriately plan your tax, you can save a lot of time and money. However, you may not always have the time to allocate for tax planning. Many small businesses want an employee to deal with the headache of taxes.
Accounting Firms are well-equipped with the knowledge of taxation. Tax-planning is one of their jobs and they work to optimize the amount of tax payable. By hiring an accounting firm, you can outsource all tax-related issues. An accounting firm will ensure your company follows all government regulations. It’ll help you get rid of all your tax obligations on time.
Tax Planning is an ongoing process, but many small businesses only see it as a once-a-year task. If you carefully consider hiring an accounting firm for taxation, your business can save a lot of time and money.
2. Provide A New Perspective
Many small business owners are busy sorting out daily operations. They’re incredibly busy with routine operations and often miss out on the bigger picture. Roberts & Cowling is one of the reputed accounting firms in Brisbane. They’ve helped many small business owners save a lot of money and view their businesses from new perspectives.
Accounting Firms have professionals to maintain accounting records and analyze them deeply. They gather new insights from your financial statements which you may miss due to your focus on daily business operations.
3. Benefit From Their Reach and Experience
Unlike you as a business owner, accounting firms have clients across many different industries. They have connections with many organizations. It can be beneficial for your company to get some advice from professionals who have managed the financial statements of numerous companies.
After working and analyzing the financial statements of many companies, they’ve got ideas about the best practices and common mistakes made by small businesses. Accounting firms can utilize their knowledge and share information to ensure that your business doesn’t make the same mistakes. You may also be interested in an article to know about how small businesses lose money needlessly.
4. Understand Legal Structure
One of the most straightforward legal structure is a sole proprietorship. Many small business owners opt for a sole proprietorship because it’s easy to form and dissolve. However, this business structure isn’t appropriate for all types of small businesses.
Opting for sole proprietorship may not always provide you with the best legal protection and tax benefits. An accounting firm will look at the nature of your business and financial statements. It’ll suggest the best legal form for your company. Selecting the best legal type will reduce your tax liability and limit personal liability.
5. Payroll Compliance
Dealing with human resources isn’t an easy task. One of the repetitive tasks a small business owner encounters is the payroll. Many small business owners don’t comply with payroll regulations and have to pay steep fines.
By hiring an accounting firm, you’re maximizing your chance of complying with payroll regulations. The accounting firm will also monitor the payroll system for preventing future issues.
6. Fix Cashflow Issues
Maintaining a steady cash flow is vital for small companies. They need to support their growth while taking care of daily business operations. Sometimes, clients delay payments, or there are unexpected expenses, making the business struggle to make ends meet.
You may not be able to perceive the cashflow trend, but an accounting firm can predict it by viewing past data. It’ll then have a system in place to balance cash inflow and outflow. By fixing cash flow issues, you have a better chance of growth.
7. Manage Debt
Many small businesses need debt to run their operations. A good accountant has a grasp of the difference between good and bad debt. The accounting firm will help you eliminate toxic debt by coming up with repayment strategies. They’ll also set the right terms for new debt.
8. Maintain Working Budget
Maintaining the right working budget can be challenging for entrepreneurs without proper guidance. Setting the correct budget is essential for your operations and business growth.
With the correct guidance of professionals in an accounting firm, your business can have a realistic budget to meet your company’s goals. Your organization can also avoid unwanted costs if there’s a strategic budget in place.
9. Strategic Finance Plan
You must have a strategic financial plan for accelerating your business growth. Having a strategic plan will help you see expenses in advance and meet your sales target. It’ll make your business futureproof, running smoothly over the long term.
Can you carry out your accounting tasks without the help of accounting firms? Yes, you can. But you’ll not be able to get all the benefits an accounting firm can offer to your business. The above-mentioned services provided by accounting firms can help your business in the long run. Are you interested in collaborating with an accounting firm now?
Feel free to share your thoughts with others by leaving a comment below.