Many small businesses owners don't realise that a staggering percent of businesses fail within the first 18 months. Typically, one of the main causes is having poor financial management.
Despite these dire consequences, many business owners go it alone when it comes to managing their money. A recent report found that 53 percent of small business owners don’t use an accountant at all. While we shouldn’t jump to the conclusion that these businesses are worse off for not having an accountant, we can’t underestimate the breadth of knowledge and experience an accountant can provide.
For example, most people don’t service their cars at home. Instead, they take them to a professional mechanic who can keep things running smoothly and spot potential issues. Small businesses need just the same attention from professional accountants in North Wales. Accountants do so much more than just tax filing. They can take a comprehensive assessment of your finances and create a forecast through the year to keep your business at a healthy, prosperous state.
It may feel daunting to let an outsider in on the intimate details of how your business is run, especially if you’ve had trouble with managing your finances in the past. But partnering with an accountant will actually help you to achieve your goals and set you up for long-term success.
Avoid an Audit
A compelling reason to hire an accountant is to avoid the dreaded audit. Unfortunately, most people think of an accountant as someone who can fix these issues after they’ve occurred. The important thing to remember is that an audit can easily be avoided if you get the guidance and counsel of an accountant year-round.
There are many explanations as to why a particular business is audited: from too many mistakes on tax forms to being too ‘charitable,’ to excessive write-offs. Think of an accountant as a long-term partner who is invested in your business and cares to keep it fiscally sound.
When an accountant consults business owners, they often tell them that they wish they could easily calculate the potential consequences and implications of making a big office purchase or hiring more employees. Having an accountant as your financial advisor to help you with budgeting and monitoring cash flow on a steady basis will allow you to navigate any hurdles that occur in real-time.
You should take a collaborative approach with your accountant, allowing you to make decisions together based on the latest data and also take advantage of a consultative relationship that will help you make business decisions when you need to make them.
Save Time and Energy
Most entrepreneurs think that a tight budget means they won’t be able to afford to hire an accountant. But if you think about how much time and effort you spend on trying to manage your finances yourself (not to mention the possible errors you could incur during reporting, and related losses from poor financial decisions), the benefits certainly outweigh the cost.
As an entrepreneur, your focus should be on running your business. Investing in a professional accountant and engaging him or her as an ongoing tactical business advisor will assist you in maintaining that focus and simultaneously keep you on the road toward your business goals.
Plan for the Future
Finally, one of the biggest benefits of hiring an accountant is getting advice on how to plan for the future. Together, you can pull reports from past months and examine the seasonality of your business. Doing this will help you determine the best time to buy inventory, and budget for big-ticket investments so that you can stay competitive and viable.
As a business owner, you are most often preoccupied with the day-to-day operations of running your business. However, an accountant can take a step back and objectively look at the big picture to find the best way to support the longevity of your business.