If you are a small business owner, especially if you are a recent startup, you may be reluctant to hire an accountant to handle your finances. You may consider it an unnecessary expense, thinking that your company is too small to require the services of a business accountant. However, poor financial management and cash flow problems are among the top reasons cited for entrepreneurial failures. The number of businesses that fail within the first 18 months of operation is 80 percent. Far from being an unnecessary expenditure, it may well be that professional financial services represent an indispensable asset to your company.
Here are some of the top reasons why hiring an accountant is important.
1. Avoid Regulatory Burdens
Regulatory burdens refer to the many filing deadlines that the IRS requires business owners to meet, as well as the penalties and fines imposed for not meeting them. The majority of small business owners cite regulatory tax burdens as one of the biggest challenges to running a company. Accounting professionals can handle these challenges for you and make running your company a little easier.
2. Concentrate on Your Business
You likely started your company because you have a passion. Unfortunately, the day-to-day realities of owning a business may prevent you from focusing on the passion that drives your company. Handing these concerns over to a financial professional allows you to concentrate on the work you set out to do in the first place.
3. Save Money
With an understanding of the ever-changing tax laws, an accountant can help you maximize your deductions and limit the amount of your tax liability. Therefore, the amount you spend on hiring an accounting professional may be outweighed by the savings on your taxes.
You may think that it is cheaper to hire an in-house financial professional than outsource to a business accountant. More often, the opposite is true. When you hire a professional CPA firm, you only pay for the services you receive, whereas if you hire in-house financial staff, you need to pay their salaries plus overhead costs like on-boarding, benefits, payroll taxes, etc.
4. Prevent Fraud
If you’re a small startup, you probably can’t afford a large financial staff, meaning that you may only be able to hire one or two professionals. This puts you at higher risk for fraud due to the lack of separation of duties. CPA firms have experienced business accountants dividing tasks and checking up on one another’s work, meaning the risk of fraud is decreased.
A business accountant is something you shouldn’t try to do without. Contact us at KMA Bodilly to learn more about accounting services available to owners of companies large and small.