Did you know that 75% of small businesses end up closing shop within the first five years itself because of waste, fraud, and accounts receivable? According to a survey by Staples, owners lack the knowledge to handle their business’ finances on their own, despite believing otherwise. Almost 19% have strange places where they have saved their emergency cash (like stashing it in their car). Not all owners believe that they know everything, though. Almost 40% wish they knew more about management. It is clear that there is only so far a small business bookkeeping software can take a company – the rest can be achieved by a competent small business accountant.
There are many reasons why small business accounting is necessary but here are a few essential ones that might make or break your business –
Small Business Owners Don’t Have The Necessary Skills To Manage Accounts
The survey by Staples reveals that because of financial issues and lack of account management, almost 28% owners postpone hiring new employees. 42% owners who are millenials say that they wish there was some support they could receive in this area from the community. Clearly, most small business owners are ill equipped to handle their accounts on their own.
On the other hand, by investing an affordable sum on money in hiring professional small business bookkeeping services, all these problems can be kept at bay. You can not only ensure that the financial side of their business is always taken care of, you can also learn a lot about the accounting of your own company. If you want your business to successfully navigate the dreaded first 5 years, this would be a move in the right direction for you.
Professionals Can Help You Manage Your Expenses
As per the Staples survey, almost 23% business owners have bounced a check in the last year. Close to 28% say that their cash flows give them grief. You can decide whether or not you want to be a part of this statistic by leaving your finances in the capable hands of a small business accounting company.
Professional small business bookkeeping services would enable you to keep an eye on your overhead expenses which can really shoot up the roof if there isn’t a trained and qualified professional managing them. The first few years of your business are crucial and this is one area where investment would reap great rewards in the future. You wouldn’t be like 48% business owners from the Staples survey who would pay others before they start saving something for themselves.
Small Business Accounting Will Cut Costs In The Right Areas
There are some areas where you need to cut costs because for a small business, a penny saved is a penny earned. However, there are areas where cost cutting can be extremely detrimental to the business. For instance, if you are finding nefarious ways to save money, you would be called up for audit sooner or later and that could be the end of your business. Instead, professional accounting for small business would help you find the right places to cut costs.
Because these professionals have years of experience under their belt, they know all the legal ways in which you could be saving money. They are also experts at management of funds which is another plus that every small business owner such as yourself needs in their arsenal. When you look at it factually, you are making a small investment at the beginning of your business but enjoying returns for the lifetime.
Professional Advice Is More Valuable To Your Business Than Anything Else
If you hire a professional for handling the bookkeeping for small business, you would getting more than just basic bookkeeping and accounting services. Professional accountants are there to offer you some vital advice for your business and it would be like having a small internal audit department built into your finance management. Because you are directly involved in your business and stand to gain or lose money if your business does well or badly, you are biased when it comes to the decisions about your business. A small business accountant is anything but that.
These professionals have, over the years, helped many a startups and small ventures find success in an industry that is cutthroat and unforgiving of the smallest of infarctions. They know exactly what you need to do in order to succeed in the long run and live to see your business reach great heights.
Time Can Be Saved With Professional Accounting
You are a business owner and your strength lies in business management. You may have been self taught or you could have received formal management education somewhere. The point is that your small business would benefit most when the right people are doing the right job – in your case, that is business management and in the case of your finances, it is a small business accounting company. Think about everything you could achieve if this big headache was taken off your hands and was handled by someone who knew more about it than you.
Time saved by you by hiring a professional could be used for planning the future of the company, ensuring that your business is working as efficiently as possible, taking care of creditors and debtors, managing customer service, and so much more. All that time you save would help your business grow.
Legal Problems Are Kept At Bay With Professional Accounting
There is no business in the world that doesn’t have some legal problems. Apart from the usual like audits, there are some unusual problems as well such as getting sued. In this social media driven age, if you are selling elephant pants, there could be a company that is in the same business as you but bigger and would want to sue you just to eliminate competition. However, if you have an expert like a professional accountant on your team, such legal problems would be kept at bay. Do you know why? Because all your documents would be in order.
Legal battles are becoming endemic in the world of small business and small business owners like you need a competent person handling your small business accounting and going through your documents with a keen eye.
Saving Tax The Legal Way Becomes Easy
The IRS is experienced and knows the areas where small businesses cut corners. You want to save taxes and there is nothing wrong with that but the moment you go down the illegal route, there is no coming back. Many business owners don’t even realize that they are doing something illegal. If you hire a professional for small business bookkeeping, you would not only find ways to save tax the legal way but the professional might also let you know about other areas where you could be claiming deductions. The losses you make (which is common in the initial years) would be lowered due to these deductions that your professional accountant points out.
Generally, taxation is one area where it is best to trust the advice of your accountant and this is also one area where the most advanced of accounting software programs won’t be able to help you.
Your Company’s Expansion Is Dependent On The Accuracy Of Accounts
If you decide to take out a loan, your bank would need your accounts and financial statements. These statements should be in order and must also come with a projection and estimate report of what the future looks like for your company. Based on all this information, your loan would be passed and your company will grow. However, if your accounts are in disarray, expansion might never happen for you because no bank would offer you a loan.
Small business bookkeeping services are staffed by professionals who know what the banks want to see – will the company make enough to pay off the loan in the future or is there a chance of defaulting? Because of this insight, business owners like you would be well equipped to handle such a scrutiny into your company’s future.
Small Business Profitability Can Be Determined With Professional Accounting
If you are a business owner who doesn’t have a background in finance, you might think that just because you are making a lot of sales, you are running a profitable business. However, the amount of sales doesn’t equate with profitability because your expenses and expenditure are deducted from it – the total cost. Not a lot of business owners understand this and thus, fall prey to the notion that there business is flourishing.
Accounting for small business is complicated and the only way to find out about your true profitability numbers is through the accounting reports and financial statements. Your professional will set standards for your business and go over and beyond basic bookkeeping for small business by offering you risk management solutions, proactive advice, alerts, and even training resources to ensure that all your employees as up to speed with the company’s accounting practices.
An accounting software will offer you a lot of charts, numbers and figures, and complicated reports about your business. But you need someone who would understand those reports and numbers and find the way to success for your business. You not only need an accountant to take care of daily finances and working capital requirements but your future growth, prosperity, and efficiency could well be dependent on the accountant you hire in the first five years of your business. Don’t let accounting be one of the areas where you try to save money. Hire the professional services of trained and qualified accountants at Jimenez Accounting today!