Reasons to Hire Accountants for Small Businesses

If a person is starting a business on a shoestring budget, they’ve likely spent a great deal of time trying to figure out how to cut costs. When an owner has accounting experience, it’s possible to go the DIY route. However, those who lack the know-how to manage a business’ books should consider hiring accountants for small businesses. Below are a few things an accountant can do for a business owner on a budget.

The Startup Process

When an owner starts a business, they need to take a variety of actions and set up various systems to build a solid foundation. An accountant can help by:

  • Determining the appropriate business structure for the client’s situation

  • Offering a financial analysis of a business plan

  • Providing advice on accounting software

  • Ensuring that accounting procedures comply with government requirements and regulations

When a business owner hires an accountant, they can learn the importance of keeping their personal finances separate from those of the business.

During Normal Operations

Once the business is established, the owner must work to maintain the accounting system. Below are a few ways an accountant can help:

  • Ensuring that independent contractors are properly classified by the IRS

  • Explaining financial statements

  • Overseeing payment and payroll processes

  • Providing advice on yearly estimated tax payments

  • Determining when and where to send 1099s and W2s

Accountants can close out the books and create year-end financial reports, and they can submit the proper paperwork to the Internal Revenue Service.

During the Growth Stage

When a client is ready to grow his or her business, an accountant can be a valuable source of advice and management help. The accountant can help in a variety of ways:

  • Providing insight on inventory management, cash flow patterns, pricing and financing

  • Offering advice on equipment leasing and purchasing

With an accountant’s help, a business owner can possibly avoid an audit. However, if that’s not possible, they can guide the owner through the audit process.

An accountant can be a great help in the startup phase, and with a bookkeeper’s help, they can form a great team. Business owners should recognize when they need to hire a professional, and they should find an accountant who can help the client maintain the business’ financial health.