Almost all successful business owners who work closely with an accountant will tell you a professional number cruncher is an absolute must. From planning a business to forming a company and applying for a loan, an accountant can make life a lot easier for you at each step.
This doesn’t mean you have to employ a full-time accountant or hire one on a retainer. Sometimes just a couple of hours of professional time is enough. The answer depends on how long it would take you to do tasks such as taxes, and then ask yourself, can I find a better use of my time?
For example, if it takes you 5 hours to do taxes and your time is worth $100 an hour. That’s a cost of $500 to do your taxes yourself. Also, there’s the risk you make errors and mistakes, especially if you’re multi-tasking as most business owners do. If you hire an accountant, it’s likely they will cost less per hour, allow you to focus on revenue generation, and get the details right.
Having an accountant during the formation of a business is important because they can help with ideation and formation of a business plan, advise you on your business’s entity structure, and help you set up your bookkeeping from the ground up. Most small businesses don’t need to have a bookkeeper on an ongoing basis immediately but there comes a point where you’ll want to outsource these activities.Until then, you can probably handle your own bookkeeping and hire a bookkeeper to do periodic reviews of your work.
An accountant can also help measure key metrics such as the ratio of salaries and other employee payments to total revenue. If the accountant uses cloud-based accounting software, they can share your business accounts quickly and easily and they can produce tables and charts that will better your understanding of your company’s current financial situation. Accountants also help improve your chances with bank loans. Just the fact that you have an accountant can make the bank look at you favorably. The accountant will be able to answer any questions your bank has about revenue projections and expenses and guide you to choose which loan to go for, what the terms and conditions are, and which interest rate is better for you.
As you can tell, accountants help out during every stage of a company’s development. This doesn’t mean you have to hire one right now, just know, the right accountant makes life easier for you and lets you concentrate on growing your business.
A qualified accountant will be able to:
- Complete and file legal and compliance documents related to your business
- Stay up-to-date with the latest tax policies and regulations
- Prepare annual, audit-ready financial statements
- Keep your company’s status updated with the relevant ministry
- Maintain administrative and personnel documents
- Manage payroll