Accounting services provide small businesses with invaluable support, keeping track of everything from overhead costs and payroll taxes.
Recent research indicates that 89% of businesses attribute increased success to working with an accounting professional. But when is it appropriate for your business?
When You’re Getting Started
An accountant can assist with setting up and maintaining an accounting system, maintaining financial documents, auditing books and statements or creating financial goals for your business. Delegating such tasks to professionals ensures they are completed accurately while freeing your mind to focus on other core aspects of running the company. Delegating these tasks also prevents common financial errors that might otherwise arise from trying to complete these tasks yourself.
Financial and bookkeeping management for any small business can be challenging at any point in its lifespan, but especially so during its initial stages. From rough ideas on napkins to operating operations, an accountant is your essential ally when navigating this unfamiliar world of accounting and tax law.
Professional accountants like CPAs can help your business stay financially stable by managing cash flows, providing financial reports and analysis and offering advice for expansion. Working with an accountant will enable your business to move to the next level and ensure you make wise financial decisions.
As your company expands, so too will its financial recording, compliance and reporting needs. At some point you may require full-time accountant to manage this escalation in work or contract with a firm offering the expertise you require at significantly reduced rates than an in-house accountant would cost.
Before selecting an accountant or accounting firm, be sure to do your research first. It’s essential that you find someone with expertise in your industry, who has experience advising small businesses similar to your own. Conduct interviews of multiple candidates before selecting one and make sure their credentials match up; making sure they have been licensed, insured, and passed any required state exams is paramount. It may also be helpful to obtain pricing information early as this can provide an accurate picture of what the total bill may look like over time.
When You’re Growing
Once your product or service has become marketable and your business has begun to expand, it may be time to hire an accountant. Accountants can help your business cope with growth by preparing tax documents and offering advice about ways to free up cash flow, save money and raise funds. They may also recommend how best to structure it for minimum taxes and maximum profits.
At this stage, your to-do list may become long and demand for your products and services can increase quickly. But if your company expands too rapidly for you and staff to manage, this could cause stress, financial problems, or even collapse. A good accountant can assist in creating a sustainable growth strategy and avoid common pitfalls associated with rapid expansion, such as cash flow shortages, overexpansion, or weak customer service.
As your company expands, its accounting tasks may become more complex and require expert analysis for accurate completion. At this point, it may make more sense to hire a full-time accountant instead of outsourcing retainer work to a firm; an accountant can help upgrade financial systems to accommodate increased volumes more easily while making tracking expenses, payrolling employees and collecting payments easier for all.
At this early stage, hiring an accountant can help your small business avoid costly errors made when trying to manage its own finances and meet tax obligations on its own. It can be easy to miss something when your focus lies with marketing and sales activities, managing employees or customer relations; an accountant can ensure your data is accurate and up-to-date and protect you against costly fines or penalties.
When You’re Getting Ready to Sell
As soon as a business owner decides they want to sell their company, it’s essential that they plan accordingly. A qualified accountant will be instrumental in getting it ready for sale by helping clean up financial records – buyers will generally require Profit and Loss Statement, Balance Sheet, and Cash Flow Statement for full financial disclosure of a company being sold – having clean financials can make your company look more desirable to potential buyers and speed up closing the deal much more quickly than without organized records. An accountant also helps plan ahead for potential tax implications involved when selling companies.
These professional accounting services assist during the preparation stage, so it’s recommended that you work with one who specializes in small business accounting and has experience dealing with companies preparing to sell. You need someone who can perform essential tasks such as helping categorize expenses and recommend an online monitoring system; and is familiar with buyers who would likely be interested in your business.
Once your business is ready to be sold, an accountant can also work with you on getting its value appraised so you have an accurate picture of its sale price. This valuation may be completed either independently by an independent accountant or M&A investment bank with experience selling companies similar to your own. Getting this done as quickly as possible so you can begin working with potential buyers on an agreeable timeline for both parties involved is critical for successful selling experience.
If your company is currently family-owned, an accountant can be invaluable in helping the owners plan for its transition into the hands of future generations. This may involve planning for tax implications, revising employee contracts to accommodate changes and creating trusts; additionally, an accountant can evaluate performance and determine how best to reward employees for their hard work.
When You’re Ready to Grow Again
Once your business has established a firm presence and loyal customer base, it may be time to consider expansion. Adding new product lines or increasing service hours are significant undertakings that may require extra funding as well as employees with sufficient time management skills to handle increased workloads. There are a few telltale signs that indicate you might be ready to take your business to the next level:
An increase in revenues is one of the best indicators that your company is expanding and primed for growth, but be wary if your expenses outstrip revenue growth; spending more than what’s made could stymie future expansion efforts.
An indicator of team health should also be monitored, whether that be through human resources metrics such as employee turnover or specific e-commerce metrics like inventory management and abandoned shopping carts. A strong, productive team is integral to your success!
Keep a tax professional on retainer to organize tax records and ensure that your business complies with all necessary legal requirements for its industry. This is particularly helpful if you plan to expand into new states or countries; an accountant can help prepare for changes in regulations and taxes as a result of expansion.
No matter the scale or scope of your operation, having the right accountant can make a crucial difference to its success. By outsourcing monthly accounting, annual tax prep, payroll processing services to Wilson Porter accountants today and discovering how we can save time, money and stress when it comes to accounting needs – and help your company thrive! Get started now – let’s work together!