Many business owners, entrepreneurs, and other creatives who are in the initial stages of their business do not hire a professional accountant. They manage the accounting tasks of the business themselves for various reasons, some of them good reasons.
If you are from an accounting background, then managing the accounting tasks all by yourself makes sense because you will have knowledge about the basics of accounting. However, accounting is not at all easy for those who are from non-accounting background.
Still, just because accounting is not easy for those who do not have an accounting background doesn’t mean accounting is not essential for their business.
Why You Need Accounting Services for Your Business
According to industry statistics, about one-fifth of business startups fail in the first year, and a whopping 95% of businesses fail in the first five years of starting due to improper management of accounts. This statistic is not meant to scare you, but rather to underscore the importance of professional accounting in business.
The critical value of procuring the services of an accountant or accounting services for businesses is summed up perfectly by this quote:
“Accounting is the language of every business and accountants are the ones who speak this language.”
When to Procure Accounting Services for Your Business
Among the crucial times when you should enlist accounting services for your business are:
1. When your business is at the initial stage
When you are a startup, small errors or silly mistakes can cause your business big losses and ultimately lead to insolvency. However, with an accountant you can avoid unnecessary financial risks, because an accountant will manage your accounting tasks with proficiency and enable you to focus on your core activities that establish your brand in the market.
2. If you have employees
As your business grows, the number of employees you have will likely also grow. Different types of expenditure are done on the employees, such as salaries, bonus payments, costs of training and business trips, etc. Hiring an accountant or accounting services will help you to properly manage your accounts and you won’t need to worry about any accounting errors.
3. If your firm is audited
Once your business gets a certain turnover, you may have to audit your processes. Auditing can be a stressful, time intensive and expensive task to carry out. Your accountant will help you in your auditing process with the best possible solutions, and also help you comply with tax payments and laws.
4. Guidance on investment
An accountant is well aware of the latest market trends and what sort of investments you should make in the market. Their guidance in making investments will help you in making good profits.
5. Advise about your capitals
An accountant will make a proper analysis of your finances and keep you updated on the financial growth of your business. If you need to take a loan, the accountant will advise you on everything from bank to payment options.
6. Comply with government regulations
An accountant or accounting service helps you to efficiently comply with the government regulations and help you to file tax returns as they have the required knowledge and certification to file them.
7. Advise about the legal structure of the company
Every business has a different legal structure, be it a sole trader, limited company or public firm. Your accountant will explain everything you need to know about the legal structure of your firm, so you can run your business as a public or limited or a sole a trader accordingly.
8. Financial position of your firm
An accountant prepares the financial statement and analyzes the financial position of your company. On the basis of these reports, you can plan the budget of your firm and review the expenses which are unnecessary.
9. Prevent financial crises
An accountant will analyze the income and expenses of your firm and inform you about your expenses so that you properly manage your expenses and savings, thereby saving you from financial crises.
10. Maintain proper cash flow
Revenue is king in every business. Managing cash flow properly is a must for successfully running your business and increasing its profitability and impact. An accountant will help you with managing it.
11. Turn pending invoices into paid invoices
Accounts payable is crucial in every business. As a business owner, you have to pay the bills you have received from vendors or suppliers. With the help of accountants, you can easily manage and keep a track of your pending bills.
12. Applying for a business loan or overdraft
An accountant will help you with your loans and overdraft. Based on your needs, the accountant or accounting service will also guide you on whether or not you need to apply for a loan.
13. Business growth
Accounting includes bookkeeping, accounts payable and receivable, invoice process and other processes. Accuracy in all these processes will boost the growth of your business. This is possible if you hire an accountant.
14. Bank reconciliation
Reconciliation is an essential process that is carried out by accountants. Reconciling bank statements help you to detect fraud, missed entries and other discrepancies.
15. Managing finances
If you are managing your accounting books on your own, you will soon realize the entire process increasingly becomes complex with time. With no or limited accounting knowledge, you will start to struggle sooner or later. Hiring the services of an accountant who's trained to manage debits and credits and other accounting processes, you'll streamline the entire process.
Savvy business owners and entrepreneurs across the world are increasingly outsourcing their accounting tasks to accounting service providers. Instead of hiring an expert and paying them a full-time salary, it is possible (perhaps even necessary) to outsource the accounting work and pay the third party provider only for the work they do.
Nowadays, you can outsource your non-core activities to outsourcing companies quite easily and affordably and maintain greater efficiency in your workflow. So, why not consider it?