When someone says the word “accountant,” they automatically think about taxes.
Ask any accountant and they’ll tell you that personal and business taxes definitely take up most of their time (think 60-70 hours a week) during the first four months of the year, otherwise known in the profession as tax season.
But if you own a business, there are plenty of other reasons to hire a CPA besides just completing your annual taxes. So many reasons, in fact, you should have an accountant you trust in your contact list for when business or financial issues come up.
Here are some common reasons your business might need an accountant:
Writing a business plan
Involving an accountant while you're writing your business plan may allow you to use accounting software to add financial projections and other reports to it. This will help you create a business plan that's realistic, professional and more likely to succeed.
Hiring a professional at this early stage will mean you get the benefit of their financial knowledge and advice right from the start. That could save you time and money compared with hiring one later in the process.
Advice about company’s legal structure
Not all businesses have the same legal structure – there are different types that are determined by a number of factors. Some might be called limited companies, limited liability partnerships or corporations, others could be sole traders or proprietors.
You should carefully consider each type before deciding which one best suits you. For example, you may do business as a sole proprietor, working on a self-employed basis and invoicing under your own name. If this is the case, you might be able to offset some of your living expenses against tax.
However, this also means you could be held personally liable for any business-related obligations. If your business fails to pay a supplier, defaults on a debt or loses a lawsuit, the creditor could legally come after your house or other possessions.
With a limited liability company structure, it's different. An accountant can explain the business structures available and help you choose the one that best suits you.
Help with the finances
Small business accounting can quickly become complex if you do it on your own. If you feel you're losing control of who owes you money and how much, an accountant can help you make sure nothing falls through the cracks.
You may also want to measure key business metrics, such as the ratio of salaries and other employee payments to total revenue. An accountant can help here by managing your payroll and producing graphs so you can see how the ratio changes over time.
They can help you understand your company's current financial situation at a glance, and help you monitor the pulse of your business and keep track of important things like cash flow.ve to let go, and learn to trust other people to handle some parts of your
Deal with the government
Some business owners are nervous about dealing with the government. This is why so many small business owners hire an accountant when the first tax filing is due.
But they can also help you deal with more than just tax returns. They can help your company interact with the government in other ways:
- Complete and file the required legal and compliance documents for your business
- Keep your company up to date with the latest tax laws
- Prepare annual statements of accounts
- Keep your company's status updated in the government's company register
- Maintain records of directors and other administrative personnel
- Organize and record share/stock allocation, such as when the business is formed, when a business partner leaves or a new partner joins
- Handle your payroll and ensuring that all employees' tax codes and payments are recorded correctly
For more information or to contact one of our CPAs to help with your business, call the Salem office at 330-332-4646 or East Liverpool location at 330-385-2160.