Small business owners have a lot on their plates, especially in these difficult times. The reality is that it can be easy for even the best CEOs of small businesses to lose track of their finances in the demanding rush of daily operations.
If you are like most entrepreneurs, you probably started your business because an exciting and innovative idea struck you. You believe that you have the passion and dedication necessary to bring that idea to life, but it is unlikely that you took on the challenge of running your own small business because you like spending hours and hours mucking through numbers and figures.
Many small business owners are so passionate and hardworking that they want to handle every aspect of their business themselves. However, this is rarely the wisest decision. You cannot be an expert in everything… and even if you are an expert at number-crunching, part of being a successful small business owner is realizing that sometimes a qualified professional with specific expertise could handle a niche aspect of your business more accurately and efficiently than you can.
Handling your own accounting takes up a huge amount of time that you could spend more productively. For most CEOs of small businesses, accounting falls into the category of jobs that it is wise to outsource. Many small business owners trust qualified CPA experts to help them keep their finances in order, and there is a wealth of such CPA agencies to choose from.
As for the expense associated with hiring an accountant, this article will show you how that expense can more than pay for itself by saving you time and money.
Here are some of the many ways a skilled CPA can help you keep your business on track to success:
Monitor and Manage Cash Flow
Neglecting to keep an eye on your cash flow can mean missing important payments and losing track of the financial health of your small business. It can be extremely helpful to have a trained pair of eyes constantly monitoring your cash flow. A CPA will ensure that your business is not in danger of running out of funds, that you are spending the outgoing money efficiently, and that all payments are on time.
There is much more to cash flow management than simply making sure your earnings keep going up. A qualified CPA can help you audit your inventory, collect receivables, collect deposits, extend payables, and make sure you have extra cash in reserve. They will know your breakeven point and ensure that your business stays healthy by exceeding that point. If your business begins to fail to break even, your accountant can help you diagnose the problem and suggest ways to solve it.
Hiring a CPA spares you from the tedious and headache-inducing job of keeping track of all incoming and outgoing cash by yourself. Knowing that someone else is handling these day-to-day expenses, you can focus on other things.
A distressing number of small business owners face penalties and fees because they made payroll errors. A qualified accountant can prevent this unfortunate outcome by helping you with payroll-related forms, processing payroll, and more. Not only will they make sure your employees' salaries are paid, but they will also manage employees' social security filings, taxes, FICA, and insurance benefits.
Having someone else to do this for you is especially useful if your small business has many employees. Even if you only have a few employees, handling payroll and related duties is just one of many ways hiring a CPA will take a lot of weight off of your shoulders.
Staying on Top of Expenses
If you have already started on your journey as a small business owner, you will already have a taste of how overwhelming it can be to keep track of your expenses. If you have not started your business yet, you will be surprised at the sheer volume of invoices, recurring expenses, and receipts you have to stay on top of. You can save yourself time and headaches by hiring an expert CPA.
Meticulous financial records are an absolute must for a small business owner. Many small business owners find themselves having to take out loans at some point. Having sparse or messy records can turn off potential lenders if you need a loan. Lenders want to see that you know what you are doing, and they do not want to spend time wading through your disorganized records to figure out your financial situation.
Another aspect of accounting that you might not have thought about is that you will need to keep up with any legislative changes and know how they will impact your business. Keeping an eye on such changes is part of a CPA's job.
When it comes to taxes, inaccurate accounting can get you in trouble, which is all the more reason to leave it to an expert. Individuals often complain about how complicated and time-consuming doing their taxes is, and these difficulties are compounded many times for small business owners. Accountants can help with everything tax-related, and you will find that their services will save you time, money, and stress.
When you hire a qualified CPA, you can rest assured that you won't have to worry about complicated tax forms and looming deadlines.Accountants know how to save you money on expenses and allowable tax deductions. They will ensure that you avoid such pitfalls as missed deductions, incorrect filing, under withholding, and missing quarterly estimates.
Better Time Management
The life of a small business owner is a busy one, and you cannot afford to waste time. Ideally, you should have the freedom to focus on essential tasks such as providing your customers with a high-quality experience, building up a memorable brand, and developing your business. These things build equity value, whereas spending valuable time doing your accounting does not.
Accounting will suck up hours and hours of your time every week, maybe even every day. This is true even for the smallest of small businesses. You can't afford to underestimate the amount of time doing your accounting will take you. Consider all the ways you could spend that time better.
There are many ways that a qualified CPA can save you time. CPAs have the expertise to review your finances and catch any errors or inaccuracies meticulously. When you need to access specific figures quickly, your accountant can pull those up for you swiftly and save you the time of searching for them yourself.
Of course, as the owner of the business, it is still crucial for you to occasionally review your own finances and sign off on important transactions. Still, your accountant can take a heavy burden off your shoulders by handling daily finances.
Saves You Money
While hiring a CPA is an expense, that is not all it is. Making this choice can save and earn you money. Think of it this way: as stated before, outsourcing your accounting will save you a lot of time that you could be allocating to other parts of your business. Every sale you make because you spend that time pushing sales and making connections with customers rather than sweating over your accounts is more money in your pocket. It is possible to make the expense of outsourcing accounting pay for itself by wisely spending the time and energy that having someone else do your accounting will free up.
Paying all of your bills on time will prevent unnecessary expenses in the form of interest and late fees. You will also save money by lowering the likelihood of making a costly mistake in your accounts. Mistakes can lead to lost revenue and even fines and fees. Certain vendors give discounts to businesses that pay their bills immediately, and your accountant will be sure to keep on top of who does this and promptly pay them to save your business money. Another way hiring a CPA will actually put money in your pocket. It is a part of an accountant's job to pursue outstanding invoices, ensuring that you have as little pending income as possible.
After considering these points, you will likely agree that as a small business owner, outsourcing your accounting to a qualified professional is well worth the expense due to the time, money, and effort you will save. You are at the helm of your small business, but a good CEO recognizes the necessity of having an expert crew working hard in their niches to steer your business to success. A skilled CPA handles the nitty-gritty of your finances. This will set you free to dedicate your time to your business--to other important, exhilarating, and rewarding challenges of running your own small business.
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