Accounting plays a vital role in running a business. Accounting helps business owners to keep track of income, evaluate the performance of the business, ensure statutory compliance (i.e. taxes), and helps to create future financial goals.
As an agency owner it's important to build a team of experts that can assist you with areas of weakness. Just as people go to insurance agents for their expertise in insurance, we should be going to accountants for their expertise in the financial management of our business. While many of us know how to balance our personal checkbook, as a business owner, there are far more factors involved in your finances; this is where the knowledge of an accountant becomes important. Here are three reasons why it's important to have an accountant for your business:
Maximize your Deductions
Most business owners don't have the time or knowledge to truly understand what deductions apply to them or their business, and to be honest, most of the time deductions are only considered around tax time.
An accountant has the ability to support you throughout the year in identifying potential deductions and also advise you on making certain decisions that could maximize your future deductions. An accountant will also be able to provide helpful reminders to keep track of expenses throughout the year so you aren't missing out on savings during tax season.
Avoid an Audit
An accountant is generally able to help businesses avoid an audit. Audits are a dreaded experience and the fear of facing one is a real challenge for most business owners. Audits can spring up for many reasons, but some common situations are: too many mistakes on tax forms, excessive write-offs or donating too much to charity. Many of the situations stem from the lack of knowledge on the business owners' part. An accountant can help you avoid those mistakes and decrease the chance of an audit significantly by making sure your financials are handled properly.
As previously discussed, most business owners don't have the deep knowledge required to efficiently and accurately handle the financial management of their business. When a business owner doesn't have an accountant, they're more likely to spend a lot of time trying to figure out their cash flow, budgets, income statements, taxes, etc., instead of focusing their time and energy on the business they know. Hiring an accountant is an investment in your business. It's a decision that will allow you to focus your time on creating the business you dreamed of.
When you're building your team of experts, you need people that will guide you through your journey with their skills and expertise. An accountant will be able to provide ongoing advice to help you attain your goals to build a successful business.