If you are planning to start your own small business, you should always think about how you can manage the business’s accounting. As at the start, business owners do not have enough funds to pay a business accountant; they choose to work it themselves. You can also select this option, but only if you have a solid background in accounting and experience in accounting management. It will indeed reduce much of the costs. But, if any mistake occurs, it may lead to huge losses, and it is not very unnatural as owners need to look over more than one aspect. That is why it is always recommended to consider hiring a business accountant.
An accountant can help you with various business aspects like choosing the correct structure for business, tax obligations, cash flow, etc. But before you proceed, you should see whether the accountant meets all the specific business requirements.
Whenever a client asks, ‘do I need an accountant for my small business?’, we answer the question with the following reasons.
When starting, you have to take many actions and set up several systems to build a solid foundation to run your business successfully. A business consultant or accountant can help you in various ways.
First of all, they can advise on determining the most suitable business structure (partnership, company, proprietorship, etc.) for your situation. In Australia, there are four business structures – Sole Trader, Partnership, Company, and Trust. Each business structure has different features, finance structures, and obligations. A sole trader is the cheapest form while setting up a company or a trust that needs initial investments. You have to choose the structure of your business according to your specific needs. A business accountant can help you with the factors that you should consider to suit your requirements.
You can get a detailed analysis of business finance. In addition, you can get valuable suggestions on using the correct type of accounting software and opening a business account in the bank.
The accountant can also help you to keep your accounting methods compliant with the ATO regulations and requirements. Last but not least, they will also give you suggestions on tracking all the costs during the daily operations.
As a business owner, you will have to deal with different tasks like sales, meeting with clients, discussing with partners, etc. And if you then have to sit for calculating the tax, the stress will undoubtedly take a toll on you, and you may make frequent errors. In addition, the calculating tax process is also time-consuming. For example, if your one hour costs about $100, then 8 hours of taxing will cost about $800, which is enormous for a small business.
If you hire an accountant, it can help you get relieved of the time-consuming activity. You can happily focus on other essential matters to grow your business and produce more sales.
Businesspersons become successful entrepreneurs because they can come up with excellent business plans. However, an innovative project doesn’t mean that it will also suit the current situation. So, there is always a high chance that these ideas may not work out well.
If you involve an accountant from an early stage of your business, you can take more practical business plans to grow your business in the correct direction. It is because an accountant can create financial projections and reports and provide professional suggestions so that you can take a brilliant plan for your business.
As your company grows with time, you will reach a point where you will not have much time and scope to deal with every business side. If you think it is becoming increasingly difficult to keep track of all the financial records, it will be better to recruit a qualified business accountant.
An accountant will give you detailed financial reports from which you can better understand the current status of your business. It will also help you keep up-to-date records about the cash flow, sales, revenue, costs, etc.
For a loan, you should have the bank’s approval first. And for that, you will have to prove that you will also repay the loan. If you have a professional accountant, they can help you provide the bank with financial figures to support the loan application.
Not only the loan approval, but your business accountant can also help you choose the most suitable type of loan.
By far, we have discussed the types of help you will receive in the initial and daily operations stage. Here we will discuss various kinds of service that you will get in the growth stage.
First of all, we have already discussed that an accountant provides valuable insight into cash flow trends, pricing, inventory management, and financing. They can also give suggestions about the lease and purchase of property and equipment. An experienced professional can create effective financial forecasts, thus helping you to make better business decisions. If you need any help even with an audit, you can ask them. They will effectively prepare and guide you through the process.
Last but not least, they can sit with you to prepare a reasonable business budget, thus helping you achieve business goals.
Besides all the points discussed above, there are other reasons to hire an accountant to manage finances. These reasons include keeping the business owner updated about the tax laws (if there are any changes) and completing compliance documents.
Do you still have the question, why do you need an accountant? Perhaps, you have got your answer. But if you still do not feel convinced, you can get in touch with a financial advisor from Palladium Financial Group to get a professional consultation.