Oftentimes, you will hear business owners talking about finding an accountant right around tax time. While tax filing is the first thing that comes to mind when business owners think of the word “accountant”, it is far from the only benefit that’s entailed.
Far from it actually. A proper small business accountant acts as an extension of your team. A partner on your side to navigate the financial hurdles entailed with running a successful small business.
There are a variety of factors to consider when choosing an accountant, from their online reputation to whether you’ve heard of them in your friend group.
What are the responsibilities of a small business accountant?
- Data Management
- Consultation
- Reporting
- Tax & Regulatory Compliance
Data Management
An accountant is a valuable resource to have on your side when it comes to managing your financial data. Your accountant is responsible for keeping your financial records organized, updated, and accessible. This includes quality control of data entry and best-practice consultations with your team.
Financial Consultation
There are many times when clients have been torn between two financial decisions for their business, only being held back by the tax implications that may follow either decision. Having an accountant on your side can help you make the right financial decisions for your business in an efficient and timely manner. Whether it’s buying that new vehicle for your business, or adding a new location, assessing these moves with your accountant will reduce error and maximize financial benefit.
Reporting
There are several different reports your accountant may provide you, two of the most common being
- Cash Flow Statements
- Profit/Loss Reports
A cash flow statement summarizes cash and cash equivalent inflows and outflows from your business. Similar to an income statement, it can give you a view of a company’s performance over a period of time.
A profit/loss statement profit and loss statements hold summarized information about expenses and revenue. Based on the standard operating procedure of a business, these statements are generated on a weekly, monthly, quarterly or annual basis.
Getting a clear picture of your financial position and progress in real-time can help you make impactful decisions that drive your business forward. All too often, business owners struggle due to a lack of visibility into their finances that stems from a variety of factors, the most common being a lack of financial organization. This is totally normal and understandable, as running a business is difficult in itself!
Tax & Regulatory Compliance
This facet of the accountant-owner relationship is arguably the most important at this point in time. With the ever-changing regulatory landscape, it’s getting harder and harder for business owners to keep up. Partnering with an accountant can help you ensure that you stay up to date with the latest and greatest tax information and changes. A good accountant will be up-to-date with your industry’s sphere and be able to provide you with genuine insight.\
Summary
No matter what stage you find yourself in your business it’s important to remember that you do not have to do everything on your own. Delegating tasks is just part of being a successful business owner, allowing you to free up your valuable time to focus on growing your business; whether that be making more sales, improving your product, or training your team.
Hypothetically, you can do your own accounting, as many business owners do. However, the top 10% generally use an external accounting firm due to the fact that as your business grows, so will demand for your time.
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