4 Ways to Help your Business Thrive with One Simple Decision
Many entrepreneurs start a business with a dream to pursue what they love to do; however, they quickly realize that running a business involves many tasks that might not be in their wheelhouse, or they simply don’t enjoy. Whether you’re thinking about starting a business, are in the beginning stages of a business, or already up and running, having an accountant in your corner can be a huge benefit. Accountants are well-versed in keeping a business organized, profitable, compliant with regulations and identifying areas of opportunity and risk. Let’s go through 4 areas where an accountant can help your business thrive.
Start-Up Process
When starting a business, it's crucial to have a solid financial foundation, and one of the key players in achieving that is an accountant. Here are a few ways an accountant can help you throughout this process:
· Determining the optimal business structure and tax classification for your business.
· Choosing and implementing accounting software that fits your needs.
· Helping you put together a financial business plan to project the profitability of a product or service.
Operations
Once your business is up and running, day-to-day operations will include financial tasks that an accountant can help with:
· Determining the proper classification of your business transactions to produce accurate financial statements.
· Suggesting which journal entries are needed and how often and automatizing this process to minimize errors.
· Overseeing company payroll and determining when and to whom to send W2s or 1099s.
· Performing month-end/year-end closing procedures and bank reconciliations.
· Providing advice on required or voluntary estimated tax payments.
Cash Flow Management
Even when a business is profitable, there could be a shortage of cash if not managed properly. To avoid running out of cash to cover expenses, you can utilize the help of an accountant to manage cash flow:
· Tracking accounts receivables and encourage business owners to follow up with their customers about their invoices due to avoid past due balances.
· Helping determine ways to incentivize customers to pay on time by offering discounts for prompt payments or negotiating shorter payment terms.
· Offering advice on negotiating payment terms with vendors to extend the time to pay.
· Analyzing expenses in detail to find lower cost alternatives for necessary expenses and cut out unnecessary expenses.
· Creating a cash flow forecast a few months into the future to understand when the business might fall short on cash, and plan accordingly.
· Advising on financing options such as business loans or lines of credit.
Growth
Once you’ve launched your business, and you begin having success, your next goal might be to grow. Whether that is adding products and services or opening a new location, here are some ways accountants can make the process easier:
· Helping analyze financial statements to understand which products or services are most profitable and have the most leverage.
· Projecting cash flow to determine how much cash will be available to invest in expanding.
· Preparing comparative financial statements to help understand trends in your business and industry.
· Analyzing the cost of outsourcing tasks so you have more time and resources available to improve products or services and find new customers.
Many small business owners believe that hiring an accountant is only appropriate for large businesses. However, having the help of an accountant at any stage of the business life cycle can lead to positive results. Whether it’s hiring a full-time accountant/bookkeeper, or hiring an accounting firm, you should always consider your options to give your business the best chance to succeed. For more accounting resources, please visit our social media: