When you’re making a living as a self-employed person or running a small business, it’s natural to want to keep costs low. Hiring people is not something you’ll do lightly, especially if you think you’re managing to get by without extra help. However, when life throws you curve balls like the COVID-19 pandemic, what you’ve managed to do for yourself might not be enough, and if you’re ambitious, then just getting by is never enough. Taking on an accountant could change the way that you do business, start saving you money very quickly and will help you make more.
Manage cashflow more smoothly
The most vital thing you need to do in business is to keep your cashflow healthy. Accountants can help with this at every stage, from improving your record keeping to helping you manage your debts and extract payment from creditors in a timely fashion. They can also provide financial advice to help you make better decisions about what you buy and when you sell, help you predict market movements, and more. Don’t make the mistake of thinking of them as minor players. David Geithner started out in accounting before rising to become a CFO at CondeNast and later at ReactiveCore.
Pay only the tax you owe
One of the first ways your accountant can start saving you money is by working through your tax bill. Tax rules are incredibly complicated and it’s easy to end up paying too much. Small business operators often don’t realize what they can declare against tax in order to reduce the overall bill. If you’re self-employed, there may be a different way you can organize your income which is more tax efficient. You could also reduce the additional tax associated with international transactions.
Access funding more easily
When you’re trying to impress a bank or other lender, it really helps to have an accountant on your team. You’ll not only be able to present a better-looking business plan, but you’ll also look more like a business that’s likely to be financially responsible in future. Accountants can also help you to identify relevant grants and loans and get a much better hit rate on your applications. They’re invaluable when you’re negotiating with potential investors.
Keep employees happy
One of the biggest complaints made by people working for small businesses is that they find it difficult to manage their personal finances because they don’t know exactly when they’re going to get paid. Having an accountant on board resolves this problem and also means that there will be no mistakes in calculating different wages with all the attendant adjustments, deductions and bonuses. Expenses will be paid promptly and correctly so that no one is left out of pocket, reducing stress all round.
Avoid falling victim to fraud
Small businesses are particularly vulnerable to fraud. Sometimes it’s external – there are a lot of scammers out there, and to the untrained eye, they can look very much like legitimate businesspeople or government representatives. Sometimes it’s carried out by people inside your company who think they can skim a little off the top because you won’t notice. An accountant will notice and can keep you safe, as well as preparing all the necessary reports should you wish to prosecute.
Never miss a deadline
Every year, thousands of small businesses fail to meet financial reporting or tax deadlines, resulting in fines, which, at this level of operation, can represent a significant burden. Accountants have these dates drilled into them at the very start of their training and can make absolutely sure that your reports are ready, in proper order, and dispatched on time every time. If you’re audited, you’ll have everything in order, making the process quick and painless.
Make your life easier
When you first thought about setting up in business, the chances are that you didn’t picture yourself doing sums all day, filling in forms and worrying about government deadlines. Hiring an accountant to look after these things leaves you free to get on with the work that really matters, the core activity of your business. You’ll work much more efficiently when focusing on what really interests you and you’ll be much more productive. You’ll also have to spend less time troubleshooting because you won’t have to deal with the consequences of mistakes in the day-to-day financial organization of your business.
Although finding the means to hire another person may be daunting, bringing in an accountant really is a situation where spending money can make you money. Success in business is all about learning how to make this kind of decision, and simply holding on to your funds in the hope that they will grow will get you nowhere. If you expect others to invest in what your business has to offer, you first need to invest in it yourself.
Patrick Foster is living the digital nomad life and contributing to a wide variety of digital publications. I love writing about all things digital, from ecommerce and branding to social media and SEO.
