Why (and when) to buy accounting services for your business

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Many business owners, entrepreneurs, and other creative professionals who are in the early stages of their business do not hire a professional accountant. They handle the accounting tasks of the business themselves for a variety of reasons, some of which are good.

If you have a background in accounting, then handling accounting tasks on your own makes sense as you will have knowledge of the basics of accounting. However, accounting is not at all easy for those without accounting background.

But just because accounting isn’t easy for those without an accounting background doesn’t mean it isn’t essential for their business.

Why do you need accounting services for your business

According to statistics released in 2017 by the Small Business Administration (SBA), about one-fifth of startups fail in the first year, and 95% of businesses fail within the first five years of startup due to poor account management.

This statistic is not meant to scare you, but rather to highlight the importance of professional accounting in business. The critical value of procuring the services of an accountant or accounting services for your business is perfectly summed up by this quote:

“Accounting is the language of all businesses and accountants are those who speak this language.”

When to get accounting services for your business

Here are some important things you need to know about accounting services and when you should get the services for your business:

1. When your business is in the initial stage

When you’re a startup, small mistakes or blunders can cause big losses to your business and ultimately lead to insolvency. However, with an accountant, you can avoid unnecessary financial risks because an accountant will handle your accounting tasks competently and allow you to focus on your core activities that establish your brand in the market.

2. If you have employees

As your business grows, the number of employees you have will likely increase as well. Different types of expenses are made on the employees, such as salaries, bonuses, training and business travel expenses, etc. Hiring an accountant or accounting services will help you manage your accounts properly and you won’t have to worry about any accounting errors.

3. If your company is audited

Once your business reaches a certain turnover, you may need to audit your processes. Auditing can be a stressful, time-consuming and expensive task to complete. Your accountant will help you through your audit process with the best possible solutions, and will also help you comply with tax payments and laws.

4. Investment Guidance

An accountant is well aware of the latest market trends and the type of investments you should make in the market. Their tips for making investments will help you make good profits.

5. Advice on your capitals

An accountant will do a proper analysis of your finances and keep you updated on the financial growth of your business. If you need to take out a loan, the accountant will advise you on everything from banking to payment options.

6. Comply with government regulations

An accountant or accounting service helps you to effectively comply with government regulations and assists you in filing tax returns as they have the knowledge and certification required to file them.

seven. Advice on the legal structure of the company

Every business has a different legal structure, whether it is a sole proprietorship, a limited company or a public company. Your accountant will explain everything you need to know about the legal structure of your business, so that you can manage your business as a public or limited company or as an individual entrepreneur accordingly.

8. Financial situation of your company

An accountant prepares financial statements and analyzes the financial situation of your business. Based on these reports, you can plan your business budget and review unnecessary expenses.

9. Prevent financial crises

An accountant will analyze your firm’s income and expenses and inform you of your expenses so that you manage your expenses and savings properly, thus avoiding financial crises.

10. Maintain an adequate cash flow

Revenue is king in any business. Good cash flow management is essential to successfully run your business and increase its profitability and impact. An accountant will help you manage it.

11. Turn pending invoices into paid invoices

Accounts Payable is crucial in any business. As a business owner, you have to pay the invoices you received from vendors or suppliers. With the help of accountants, you can easily manage and track your pending invoices.

12. Apply for a business loan or overdraft

An accountant will help you with your loans and overdrafts. Depending on your needs, the accountant or accounting department will also guide you on whether or not to apply for a loan.

13. Business growth

Accounting includes bookkeeping, accounts payable and receivable, invoicing process, and other processes. The precision of all these processes will boost the growth of your business. This is possible if you hire an accountant.

14. Bank reconciliation

Reconciliation is an essential process that is performed by accountants. Reconciliation of bank statements helps you detect fraud, missed entries and other discrepancies.

15. Manage finances

If you manage your accounting books yourself, you will quickly find that the whole process becomes more and more complex over time. Without accounting knowledge or with limited knowledge, you will sooner or later start having difficulties. By hiring the services of an accountant trained to handle debits and credits and other accounting processes, you will streamline the entire process.

Conclusion

Nowadays, savvy business owners and entrepreneurs all over the world are outsourcing their accounting tasks to accounting service providers. Instead of hiring an expert and paying them a full-time salary, it’s possible (perhaps even better) to outsource the bookkeeping work and only pay the third-party provider for the work they do. In developed countries like the United States, Canada, and the United Kingdom, you can outsource your non-core activities to outsourcing companies quite easily and cheaply to keep your workflow efficient.

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