Why You Need an Accountant For Your Small Business
March 19th, 2014 by Digithales
When you embark on a new business journey, an accountant can be very integral to your business’s long-run success. Accountants have expansive knowledge of financial reports, tax regulations and business income and expenses.
An accountant will help you in choosing the entity that best fits your business. It can be very confusing when deciding on which type of business will best work. There are many choices available, including whether you are running a sole proprietorship or a limited liability corporation (LLC), a limited partnership or whether to incorporate your business or not. An accountant can explain each type of business and make his or her recommendations.
Accountants can recommend and implement an accounting system that will most benefit your business. Trying to choose an accounting software package without understanding each package’s features and benefits may mean you will miss out on something beneficial to your business. Accountants may even have proprietary software that can be individualized that will serve you better than a box solution.
Initially, in order to properly start a business, you should have a completed business plan. Accountants can help you with the financial portion of this plan, as well as keep your financial reports current.
As you know, IRS regulations change from year to year. Accountants are required to stay up to date on these changes and communicate them to their clients, as well as ensure that your small business pays estimated amounts of business taxes throughout the year and are responsible for filing your taxes with the IRS in a timely manner. If you have employees, you will have to provide W2 and 1099 forms. Accountants can help with this important task.
As an owner of a small business, you will want to keep track of all incoming cash and outgoing expenses. An accountant will inform you what types of deductions are allowed and keep your personal and business expenses separate. Keeping them separate is very important for tax purposes because of the aforementioned IRS changes and a possible audit.
An audit can be very stressful to handle on your own and isn’t something you should spend time on because running your business can take up all your time. Accountants who are trained to deal with the IRS and handle audits will allow you to work on what you know best and ensure you supply the business information needed to complete the audit successfully.
When your business begins to grow, having an accountant who is familiar with your business will be an asset. By analyzing your financials, an accountant can help you identify the areas where your business is growing and where you may need assistance.
Developing relationships with all professional service providers will allow them to understand your goals for your business and they can help you achieve them. An accountant can be a valuable partner over time as you grow your business.