Starting a small business is a labor of love. The path to entrepreneurship is expensive and physically and mentally demanding. Given the sacrifices, new business owners often take a parent-like approach to their business, in that, they try to handle every facet of the operation on their own, including finances.
This mindset is not always best for the company. Here are four reasons small business owners should partner with an accountant to keep their business goals on track.
1. A Professional Accountant Will Help Preserve Your Sanity
More than 60 percent of all business owners work more than 40 hours per week. During an aggressive workweek a business owner will have to deal with the pressures of being the owner, managing employees, ordering inventory, and more. The combination of all these factors means the likelihood of a stress-free existence can feel a nonexistent possibility.
Business owners that add managing the company's finances to their agenda are simply adding stress to their life. Full-service accounting firms are equipped to handle every area of business finances, from bookkeeping to payroll to tax preparation.
A small business owner that relies on professional accounting services will create a healthier balance between business operations and their personal life.
2. A Professional Accountant Will Help Protect Profits
The formula behind success is often overly simplified. There is the idea that as long as a business is increasing their sales, they are also increasing their profits. However, a businesses field of success is as wide as the gap between their operating costs and the total of their sales.
Even a company that experiences a significant amount of sales, can fail if their operating costs are also high. Accountants do more than just input financial data - they also analyze and track information like operating costs and profits. An accounting firm can help small business owners highlight the areas in which they can lower their operating costs to save money and improve their bottom line.
3. A Professional Accountant Will Help You Avoid Tax Pitfalls
Small businesses can fail due to tax-related mistakes. One reason is that many small business owners don't have a full grasp of all the expenses that qualify for a deduction.
For example, when the delivery vehicle breaks down, and you have to rely on your personal vehicle for a few months, you can claim the mileage, insurance, loan payments, parking fees, fuel, and other maintenance costs during this period in your taxes. Think of it this way - a missed tax deduction is the same as throwing money out the window.
Aside from lost tax deductions, if you pay fewer taxes than you owe, then you can face hefty fines and penalties. Accountants understand both the federal and state tax structure, as well as the local New Hanover County tax guidelines, and will use this knowledge to help you avoid tax pitfalls and save money.
4. A Professional Accountant Will Improve Growth Plan Accuracy
For many business owners, the business started as an idea that began at the kitchen table, flourished into a home-based business and has now grown into an operation with its own building. However, this is not where your story ends. Your goal is to see your company expand even further, but you can't accomplish this goal without a solid plan.
An accountant will help you develop a reliable path to growth. From making financial changes today that will help your business in the future to predicting the growth potential of your business over the next five years, an accountant can help you take your business from where it is to where you want it to go.
It's never too early for a small business to partner with an accountant. At Quality Bookkeeping Services Inc., we are happy to partner with you through every stage of your growth. Give us a call today to learn more.