There are many reasons to hire an accountant for your small business. They can be very helpful from forming a business plan to company formation and indispensable when it comes to filing your taxes and government audits. An accountant can make life much easier for you, not to mention less stressful.
As your business grows, so will your accounting needs and requirements. An accountant can handle so much more than just your payroll and tax returns. They can help you save dollars and relieve growing pains along the way. While many small business owners are looking to save money and cut corners, an accountant is one expense you don’t want to cut back on.
It Starts With Your Business Plan
Having an accountant review your business plan will open new possibilities that you may not have thought of yet. An accountant will be able to use accounting software to help you create a business plan that is realistic and most likely to succeed.
By involving an accountant at the formation stage of your business, even if only to attain advice, you will gain insight from their financial knowledge and develop a plan for success right from the beginning. This could save you a lot of time and money when hiring later on.
Implement a Legal Structure that is Best for Your Company
There are many different types of legal structures – corporations, LLC’s, LLP’s, and sole proprietors. An accountant is familiar with each one and will be able to recommend the one best suited to your busienss needs. For instance, if you do business as a sole proprietor and invoice under your name, you might be able to offset some of your living expenses against tax.
On the flip side, this also means you could be held personally responsible for any business-related obligations. If you fail to pay a supplier, default on a debt or lose a lawsuit, the creditor could legally come after your house or other possessions.
With a limited liability company structure, the liability of the business is limited to the assets owned by the business, not you personally. Business structures have their pros and cons and an accountant can explain their differences and help you choose the one that best suits your business.
Managing Your Finances
Small business accounting can quickly become complex and you may want to seek help sooner rather than later. If you feel you’re losing control of your accounts receivable, an accountant can help you get back on track.
You will also want to chart your key business metrics such as ratio of salaries to total business revenue. Your accountant can provide a lot of insight by managing your payroll and measuring key business metrics, such as the ratio of salaries and other employee payments to total revenue and how that ratio changes over time. This will help you make better business decisions that promote the growth of your business.
Government Paperwork
Hire an accountant when you have to deal with the government, such as when your first tax filing is due. It can be daunting dealing with government paperwork and running your business. But your accountant can also help you cope with more than just tax returns. They can help your company:
- Complete and file the required legal and compliance documents for your business.
- File the necessary paperwork when you are being audited.
- Keep your company up to date and in compliance with the latest tax laws.
- Prepare annual statements of accounts.
- Keep your company’s status updated in the government’s company registry.
- Organise and record share/stock allocation, such as when the business is formed, when a business partner leaves, or when a new partner joins.
- Handle your payroll and ensure that all employees’ tax codes and payments are recorded correctly.
Preparing your tax documents correctly could not only save you hours of work but also help save you money. A good accountant will use their knowledge of tax laws and legislation to suggest ways you can free up cash flow, save money, and raise capital for expansion.
If you are looking to hire an accountant in Chicago for your small business needs, give Accounting Solutions Ltd. a call today to receive a FREE 60 minute consultation, 773-267-7500. We help small businesses achieve financial success and we want to do the same for you. To learn more about hiring an accounting, check out our post on 7 Questions You Must Ask When Hiring An Accounting Firm.