Why You Need a Small Business Accountant All Year Long, Not Just at Tax Time
+ The (many) downsides of DIY small business accounting
Small businesses often face the challenge of managing finances and keeping track of their expenses and revenues. While it may be tempting to handle accounting tasks in-house, it is important to understand the benefits of hiring an accountant during tax time. Here are ten reasons why your small business should consider hiring an accountant for tax season:
Expertise and experience: Accountants have a deep understanding of tax laws and regulations, and have the experience to navigate through complex financial statements and tax codes. This helps ensure that your small business is compliant with all tax laws, reducing the risk of penalties or fines.
- Time-saving: Tax preparation and filing can be a time-consuming task, especially for small business owners who are already stretched thin. An accountant can take care of these tasks efficiently and quickly, freeing up time for you to focus on other important aspects of your business.
- Tax planning: An accountant can help you plan for taxes throughout the year, so you are better prepared when tax season comes around. They can provide guidance on how to structure your business finances to minimize your tax liability, saving you money in the long run.
- Maximizing deductions: Accountants are experts in identifying tax deductions and credits that your business is eligible for. They can help you take advantage of all the deductions you are entitled to, reducing your tax bill and keeping more money in your pocket.
- Accuracy: Accountants have the knowledge and expertise to ensure that your tax returns are accurate and complete, reducing the risk of errors that could lead to an audit or other penalties.
- Record keeping: Accountants can help you keep your financial records organized and up-to-date, making it easier for you to track your expenses, revenues, and tax liability.
- Stress relief: The process of preparing and filing taxes can be stressful, especially for small business owners who are not familiar with tax laws and regulations. Hiring an accountant can reduce the stress and anxiety associated with tax time.
- Avoid penalties: If you make a mistake on your tax return, you may face penalties and interest charges. The CRA does not accept ignorance as a valid reason for makingsmall business tax errors. An accountant can help you avoid these penalties by ensuring that your tax return is accurate and compliant with all tax laws.
- Peace of mind: With an accountant on your team at tax time, you can have peace of mind knowing that your taxes are in good hands. You can focus on running your business, while your accountant takes care of the financial details.
- Cost-effective: Hiring an accountant may seem like an expense, but it can actually save you money in the long run by reducing your tax liability and avoiding costly penalties and fines.
Of course, hiring an accountant to help with your taxes is really only one reason why you should consider doing so. The simple fact is that a chartered professional accountant can be one of your small business’ best allies all year round, for years to come.
Here’s a look at some of the other great ways working with an accountant beats trying to manage your small business finances alone no matter what the time of year:
- Accurate Financial Records: An accountant can ensure that your financial records are accurate, complete, and up-to-date.
- Improved Decision-Making: An accountant can provide valuable insights and advice that can help you make informed business decisions.
- Increased Profits: An accountant can help you identify areas where you can cut costs and increase profits.
- Better Cash Flow Management: An accountant can help you manage your cash flow more effectively, helping you avoid cash flow problems that could negatively impact your business.
- Professional Representation: An accountant can represent your business in financial matters, such as audits and negotiations, providing a level of professional representation that you may not be able to provide on your own.
The Dangers of DIY Small Business Accounting
Still not convinced? While it may seem like a good idea to save money by handling your own accounting, and the software available does not look too hard to master, there are many cons to consider before making this decision.
- Time-Consuming: Accounting is a complex and time-consuming task that requires a significant amount of focus and attention to detail. For small business owners who are already stretched thin with managing their day-to-day operations, handling their own accounting can be a major burden.
- Lack of Expertise: Accountants are trained professionals who have a deep understanding of the tax laws and accounting regulations that apply to your business. They are equipped to handle complex accounting tasks and provide the best advice to ensure that your business stays compliant. Without their expertise, small business owners are at risk of making mistakes that can have serious consequences.
- Increased Risk of Fraud: When you handle your own accounting, you are more susceptible to fraud. You are more likely to overlook errors or suspicious transactions that could indicate fraud. An experienced accountant is more likely to identify and report these issues, helping to protect your business.
- Inefficient Record-Keeping: Small business owners who handle their own accounting are often more prone to making mistakes when it comes to keeping records. This can lead to a lack of efficiency in record-keeping and a higher risk of audits and penalties.
- Missed Tax Savings: Accountants are familiar with the latest tax laws and regulations and can help you identify tax savings that you may not have otherwise known about. By doing your own accounting, you risk missing out on these savings, which could end up costing you money in the long run.
- Limited Ability to Scale: As your business grows, your accounting needs will become more complex. Without the help of an accountant, it will become increasingly difficult to manage your finances effectively.
- Limited Access to Financial Reports: Accountants are able to generate comprehensive financial reports that give you a clear picture of your business’s financial performance. Without this information, it can be difficult to make informed business decisions.
- Inability to Focus on Your Business: When you handle your own accounting, you are taking time away from the core operations of your business. This can limit your ability to focus on the things that are most important to growing your business.
- No Professional Indemnity Insurance: Accountants are required to have professional indemnity insurance, which provides protection in the event of errors or omissions. Without this insurance, small business owners are at risk of being held liable for any mistakes that they make.
- Increased Stress: Accounting can be a stressful task, especially for those who are not familiar with the process. By handling your own accounting, you are adding an additional source of stress to your already busy life.
Ready to work with an accountant you can rely on every day of the year? Contact us today and let’s get started!