Who needs accounting services the most?

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Figures show that 57% of small businesses don’t use an accountant, could this have something to do with the business failure rate in the US?

The fact is that some types of businesses need an accountant more than others. Here we have compiled a list of the top 10 who need these services the most:

1. Startups. You have a great idea, but you need angel investors or venture capital to get it off the ground. People may know your skills in the industry, but not your skills as a manager and administrator. Your investors want a qualified professional who monitors their spending. The Huffington Post reported “For every success story you read, there are 100 that failed.”

2. Businesses with employees. Before you roll your eyes, know that the Small Business Administration reports that 80% of American small businesses have no employees. That leaves about 5.8 million businesses with employees, which means tax preparation, tax planning, accounting, reporting and more. They need an accountant.

3. When financial statements are required. Banks and other lenders will require financial statements when extending or renewing loans and lines of credit. They want to see an honest picture of the company’s finances prepared by a third party.

4. Monitoring Required. Certified government contractors bid on federal government projects. The government is frequently accused of wasteful spending. One of the preventative measures they take is to audit contractors providing goods and services. You need your own accountants to interact with their auditors.

5. Nonprofit. Charities rely on the goodwill of the public. Universities also fundraise from donors who are proud of their school. If the organization finds itself in a difficult financial situation, people want to know how the money was spent. Some non-profit organizations may receive government grants to carry out their mission. Charities may not pay taxes, but they must file documents with the federal and state governments. Staff and councils are held accountable. They need a professional accounting firm.

6. Public enterprises. Many companies have shareholders. They may not be listed on the NYSE, but there is a market for their stocks. They are required to produce annual reports and other documents informing shareholders and the government about the health of the company. This is not amateur work.

7. Cash income. Nothing catches the eye of the government like a business that deals primarily in cash. Bars and restaurants are easy examples, but other B2B and business-to-consumer services fall into this category. If the government is interested in it, you must provide abundant documentation. How many times have you heard, “Follow the money?”

8. You do business abroad. The government is concerned about money laundering. It is illegal to bribe to obtain business. The government prohibits US companies from doing business with companies domiciled in certain countries. The United States embargo against Cuba began in 1962 and was in place until the United States restored relations with Cuba in 2014. Sanctions against other countries are in the news almost daily.

9. You or your company have a high profile. In the court of public opinion, you are guilty until proven guilty. The IRS works on the same principle. You must be able to prove that you kept adequate records and filed them on time. You don’t even have to be the target. If your biggest client gets caught up in a scandal, your business could be put under surveillance.

10. Previously audited by the IRS. You are now on the radar. Be careful, because you are being watched.

5 types of people who really need an accountant

In certain situations, it is obvious that some people really need an accountant, here is a list of the top five who could use your professional services the most:

1. They have already been audited. As above, they are on the IRS radar screen.

2. They are unable to keep records. Someone has to do it for them. They are willing to pay for the service.

3. They haven’t filed taxes in several yearsrs. Now the IRS has caught up with them. They need expert help from their side.

4. They owe the government money. The longer they delay dealing with the problem, the more it will cost.

5. People with secondary income. It is the people who consult; a teacher who works during the summer; someone who sells a lot of things on e-Bay; or officially retired and collecting social security, but also receiving a paycheck.

Here’s the challenge: these business owners and individuals may not realize they need an accountant. You need to contact them before it’s too late and asking for references could be your first step.

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