Small businesses are the backbone of many economies, providing goods, services, and employment to local communities.
As a small business owner, you’re likely to face many challenges and obstacles. Least of all, you’ll need to manage your finances, taxes, and other accounting-related tasks.
This is where an accountant can come in handy. They can offer expert advice and support to help your business grow and succeed. In this article, we’ll discuss ways an accountant can help your business.
#1. Business Planning and Strategy
As a business owner, you need a clear plan and strategy for your success. An accountant can help you create and implement a solid business plan and strategy.
Firstly, they can provide financial insights and analysis to help you make informed decisions about your business. This includes forecasting and budgeting, which are essential for creating a successful business plan.
An accountant can create financial models, including sales projections, operating expenses, and capital expenditure. With this information, you can set realistic goals and identify potential challenges in your business plan.
They can help you with cash flow management, so you have enough funds to support your business operations. This is important for businesses with irregular cash flows, such as seasonal businesses.
An accountant will help you identify areas where you can reduce costs and maximise your profits. This is essential for businesses with tight margins. Reducing costs can make the difference between succeeding and failing.
They can help you to develop and implement a strategic plan for your business. This involves setting long-term goals and creating a roadmap for how to achieve those goals.
They can help you evaluate your business’ strengths and weaknesses and help determine which areas need improving. They will help you identify growth opportunities and assess potential returns on investment for various business ventures.
>> RELATED ARTICLE: We’ve written an article for you explaining how to develop a valuable business relationship with your accountant and what questions to ask them.
#2. Tax Planning and Preparation
An accountant is an essential professional in helping individuals and businesses with tax planning and preparation. They know what’s required to ensure tax obligations are met and how to maximise tax benefits.
An accountant can help you and your business identify areas where tax savings can be made. They can anticipate tax changes and advise you how to adjust your financial arrangements accordingly.
They will help you determine your tax obligations. They’ll advise you how to manage those obligations, such as using deferring tax or budgeting funds to pay taxes.
Preparing Tax Returns
An accountant will ensure all required information is included and your returns are accurate. They’ll help identify deductions and tax credits you may be eligible for, and ensure you claim them correctly. They will review returns to ensure they comply with tax laws and regulations and represent you during an audit.
Maximising Tax Benefits
An accountant can help you to take advantage of tax benefits by advising the best tax strategies. They will help you structure your finances to minimise your tax liability. For example, they’ll advise the ways to claim business expenses, such as depreciation and home office expenses.
Reducing Tax Liability
An accountant will advise tax-efficient investment strategies. They’ll identify opportunities for tax savings, such as tax-deferred investments and tax credits. They advise how to structure business transactions, such as mergers and acquisitions, to minimise tax liability.
#3. Bookkeeping and Record Keeping
Keeping accurate, up-to-date financial records is essential for any business. An accountant can set up a bookkeeping system tailored to your specific needs. They’ll provide ongoing support to help you maintain accurate records.
This can be helpful for small business owners who are not familiar with accounting practices. Many struggle to keep up with the day-to-day tasks of bookkeeping.
An accountant can help in the following ways:
- Record Transactions: They’ll ensure financial transactions are recorded accurately and in a timely manner. They can set up proper systems of record keeping. This will minimise the risk of errors and help you prepare accurate financial statements.
- Organise Financial Data: An accountant can organise your financial data in a systematic manner. This will make it easier for you to understand your financial position. They will categorise transactions into various heads, such as income, expenses, liabilities, and assets. This will help provide you with a clear picture of your business’ financial health.
- Keep Track of Invoices and Receivables: An accountant can help keep track of invoices issued and payments received. This will help to ensure payments are recorded accurately, and discrepancies identified and addressed promptly.
- Prepare Financial Statements. An accountant will prepare various financial statements such as a balance sheet and income statement. They provide valuable information about your business’ financial position to help make informed decisions.
- Ensure Compliance. An accountant will help you comply with the tax laws and regulations. They’ll keep track of tax due dates and help prepare and file the tax returns accurately.
- Monitor Cash Flows. An accountant can monitor cash flows and help identify cash flow problems. They can suggest measures to improve cash flows and ensure your business has sufficient funds to meet its obligations.
#4. Business Growth and Expansion
As a business grows, it’s increasingly important to have accurate financial information and oversight. Accountants play a critical role in ensuring a business’ financial health and help it to grow and expand.
Financial Planning and Analysis
An accountant will create a financial plan for your business. They’ll forecast future sales and expenses. They’ll help identify risks and opportunities, and help you set realistic financial goals. By monitoring your financial performance, they’ll provide insights and recommendations to improve and grow.
Accurate and timely financial reporting is crucial for making informed business decisions. An accountant will ensure your financial statements are accurate, complete, and meet regulatory requirements.
Cash Flow Management
Managing cash flow is a critical aspect of business success. An accountant will help you understand your cash flow position. They will develop cash flow forecasts and implement strategies to manage your cash flow more effectively.
>> RELATED ARTICLE: If you’re concerned with your cash flow, we’ve shared some practical advice in a previous article.
Debt and Equity Financing
As a business expands, it may need to raise capital from outside sources, such as banks or investors. An accountant will prepare financial statements and projections to support your request for funding. They’ll even help negotiate with lenders or investors.
An accountant can offer you valuable support. They’ll help you navigate the many challenges and complexities of financial management. From planning and strategy to tax and bookkeeping, they’re a valuable resource to help you grow and succeed.
Are you concerned about the way your accounts are being managed? Would you like some friendly, no-obligation advice? If so, get in touch with us here at Business Advisory Services. We’d be delighted to help you.