As a business owner, up until this point, you may have managed your money successfully.
Software programs like QuickBooks make it possible for smaller businesses, even if you don’t have much financial knowledge or experience.
However, as your business — and revenue — grow, managing your financials may become a task you don’t have the time or knowledge to manage. We also find many owners spending a large portion of their time on accounting versus what they do best, which is managing their business and making money. Specifically, when it comes avoiding legal and compliance issues, accountants can be worth their weight in gold.
If you’re not sure if you need to help, look for some of these signs:
1. You Aren’t Familiar with Accounting
If financial statements confusing, you have a hard time creating reports, or you are lost when it comes to accounting terms, you likely need to hire an accountant — at least initially — to coach you in all things financial. An accountant can talk to you in straight terms, weed through terminology, and teach you how to manage your own finances. In addition, you don’t want to miss key information or make mistakes early that could cost you down the road. An accountant can start you and your business off on the right track.
2. Accounting Takes You Away from More Important Tasks
This is a key trap that many business owners fall into. Perhaps you have some working knowledge of accounting, but managing the books is preventing you from accomplishing tasks that could directly grow your business (for example, acquiring new clients or moving into new markets) or managing your business effectively (such as dealing with performance issues or troubleshooting service problems). Hire an accountant so you can focus on winning more business, innovating, building your team, and other development activities.
3. You Have Experienced Rapid Growth
Making more money is a great thing. However, as you expand, you will also serve more customers, hire more employees, take on additional vendors, and more. All those things require more paperwork and number crunching, and it could rapidly become overwhelming.
4. Revenue Is Increasing but Profit Isn’t
If you are selling more than ever, but you aren’t seeing a higher profit, an accountant can take an objective look at your overhead costs and point out areas where you can cut costs or make other adjustments to increase your profit margins.
5. Your Investors Expect Professional Financial Reports
Accountants can create detailed, accurate reports that keep your investors happy which will allow you to focus on tasks like growing the business. Additionally, if you are looking for a loan or funding from an investor, you will need to present a polished business plan. An accountant can help you flesh out the financial portion of your plan, ensuring that you’ve thought of everything.
6. You Want to Expand into a Different State
If you want to open a new location, distribute in a new state, or hire employees in other states, an accountant can help ensure you are compliant with regional sales, income, or payroll tax-reporting requirements.
7. You’re Planning to Buy or Sell Property — or Sell Your Business
If you want to grow through an acquisition, sell off parts of the business, or sell the entire business, an accountant can walk you through the process and determine how to structure the transaction so that you aren’t hit with overwhelming taxes.
8. You’re Facing an Audit
An accountant will guide you through this messy process by preparing you to manage the auditor or by working with the IRS on your behalf. An accountant can save you precious time and money and offer guidance during a particularly stressful time.
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