If you own a small business and are only using an accountant to prepare your taxes – or aren’t using an accountant at all – you might be missing out on the key component that can allow your business to truly thrive.
An accountant can help at all stages of your company’s growth, from the creation of a business plan to incorporation to expansion. Below we’ll discuss how quality accounting can propel your business to success, as well as some of the potential pitfalls you may be risking by failing to take full advantage of small business accounting services.
Some million- and billion-dollar startups are a thing of legend: formed in a garage with a shoestring budget and no business plan. But for the vast majority of businesses, this fly-by-the-seat-of-the-pants approach will lead to an early and uneventful failure.
Having an accountant on board during the creation of a business plan can ensure that your business is set up in a way that provides the best growth opportunities. Deciding between an S Corp, C Corp, LLC, LLP, or another business structure can be tricky, and with the advent of the Tax Cuts and Jobs Act in late 2017, there are more tax advantages available for small businesses than there have been in decades. For example, business owners who receive pass-through income from an S Corp can take an additional 20 percent deduction on this income.
An accountant can work with you to determine which business structure makes the most sense and can catapult you to profitability quickly. And although accountants aren’t lawyers, they also provide some expertise when it comes to choosing a way to shelter or separate your personal assets from your business ones.
Setting Up the Books
Once your business has started bringing in some income (and making expenditures), it can be easy to get lost in the flurry of activity. Before you know it, you may be having trouble determining just who owes what. Even if you don’t employ an accountant full-time, involving one in this setup process can help you get a workable system in place to track transactions in real time. Not only will this make it easier to keep a handle on your cash flow, but it can also make it much easier (and less expensive) to prepare your business taxes.
After you have a solid accounting system in place, an accountant can help you measure a wide range of business metrics. Simply knowing that you’re making money isn’t enough—you need to know how much money, where it’s going, and how your expenses are tracking business income over time.
An accountant can help you crunch this data to make forecasting decisions: hiring new employees, adding a 401(k) or profit-sharing plan, or taking other steps that can add costs in the interim but set you up for future growth
Delegating Financial Affairs
As every business owner knows, running a business is a 24/7/365 job. With the variety of pressing decisions that can face you on a daily basis, delegating accounting tasks like payroll, tax preparation, and other financial affairs can free up a major chunk of your time to focus on more big-picture issues.
If you’re ready to delegate some of your small business accounting tasks or just want some help setting up a business plan, the experienced accountants at Klein Hall CPAs can help. As a full-service CPA firm, we provide a wide range of services to businesses, governments, not-for-profits, and more. Contact us today to learn more about what we can offer your business.