Unless your small business is in the tax, accounting, or finance space, you may not have the in-house experience and expertise you need to achieve your goals. According to a recent Small Business Accounting survey, just 40% of small business owners believe they are extremely or very knowledgeable about finance or accounting matters.
Most businesses need help, and there’s more involved than recording a few numbers in some columns. The truth is that an accountant can do much more for your small business than keeping your books and filing your taxes. Here are eight essential accounting services that are sure to help your small business achieve success.
1. Tax Planning
While a majority of small business owners (71%) turn to an accountant to prepare their taxes, just under one-third (30%) ask for tax planning advice. Tax planning can help your business reduce its taxable income and even eliminate some taxes. This is an ongoing process, where your accountant can help your business maximize credits and deductions in the coming years.
2. Legal Structure Advice
While your accountant isn’t an attorney, they will be able to advise you on the potential financial implications of different legal structures. A majority of small businesses in the U.S. are sole proprietorships, but this may not give you the best tax benefits and personal protection as a business owner.
3. Payroll Preparation
About half of all businesses outsource their payroll preparation, and for good reason. Mistakes in this area can be costly in the form of fines for non-compliance. Not only can an accountant help you comply with government paperwork, payroll taxes, and insurance requirements, but they can also help monitor your payments so you understand the ratio of payroll to revenue.
4. Regulating Cash Flow
Troubles with cash flow are the number one reason that small businesses fail. Unexpected expenses, late-paying clients, or just poor cash management can spell trouble for your business. An accountant can help you understand your cash flow trends and alert you quickly if there is a potential cash crunch on the horizon that you need to address.
5. Managing Debt
Most small businesses carry some form of debt, but having too much or the wrong type of debt can be costly. Your accountant can help you discern between good and bad debt and give you reasonable repayment and financing strategies to help get rid of high-interest debt.
6. Developing a Budget
Careful planning is the foundation of any successful business, and financial budgeting needs to play a role in your company’s strategic plans. Your accountant can help your business go beyond ballpark estimates to establish more accurate budgets for the coming year and each quarter that will help you eliminate unnecessary costs and facilitate growth.
7. Facilitating Accounts Receivables/Collections
More than half of small businesses face challenges with receivables and collections. If you have vendors or customers that routinely pay late or are having trouble tracking your receivables, it’s time to get some help. Accounting firms can help you set up systems to deal with unpaid invoices as well as track them more efficiently.
8. Preparing for Growth
Most businesses have growth and expansion as a goal, and this is tough to achieve without sound financial guidance. An accountant can help you look at the big picture and plan for things like hiring new staff, opening another location, and buying additional equipment. If you need loans to facilitate your growth, your accountant can help produce the documentation you need for your applications.
Orcutt & Company is a full-service financial solutions provider for small businesses. We offer comprehensive services plans meant to give your business a single solution to managing its accounting, bookkeeping, payroll, planning, and tax preparation needs. Contact us today to learn more about how one of our service plans can meet your needs.