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If you’re in small business, you’re probably very competent with your books and accounts. Modern accounting software makes doing all the basics fairly easy, with a bit of customization.
Your knowledge of your business ensures that you do your books as well as possible, but accountancy places some serious (and sometimes infuriating) demands on even the most astute business people.
Accountants can help you with the most baffling and annoying accounts issues. From balances that refuse to add up to managing accounts cost centers and entries, they’ll do it all for you. These accountants want your business, and they’ll often deliver a lot of additional help and support for your money. Typically full-time accountants can earn upwards of $70,000 per year on average, so it’s a considerable expense. As a small business, you might not need a full-time accountant, but having someone on hand to provide support and service is certainly useful.
Key issues in small business accounting
The key issues are all practical, and sometimes very demanding:
Small business accounting and bookkeeping are notorious for consuming a lot of extra time and effort
Many small businesses consider the amount of time required to be counterproductive. The time used on accounts and bookkeeping could be better diverted to sales and other business operations. Some cynics even suggest the time would be better used having a life outside work.
Managing accounts isn’t really easy, even for super-competent small businesses.
Despite good software and conscientious work, the issues of managing your book balance, individual accounts, invoicing and other basics can be quite difficult. These issues can be problematic, and consume a lot of time and labour. Compliance is a major issue affecting all small businesses.
Things like tax issues, like sales tax, payroll or VAT, for example, can be pretty serious problems. Small businesses may or may not know how to provide the accounts information required for proper compliance. While most taxation authorities fully appreciate the problems, these compliance issues are also legal issues for businesses.
What an accountant can do for you
Accountants are trained to solve accounting problems. You’d be astonished how specialised accounts training is these days. CPAs are often the best option for some businesses, particularly when you’re looking at a full spectrum of business accounts needs.)
For example – Bookkeeping and accounts software best practice:
Bookkeeping is highly useful in providing information for accounts. Good accountants can also help you with your software, untangle entries, and clear up any other problems for you.
Accounts management advantages:
Most small businesses naturally have their own methods for managing their accounts. The problem is that accounts must be maintained in proper formats for many business purposes. If for instance, your business applies for a loan, the first thing the lender will ask for is your accounts and your business plan, based on your accounts. If you’re buying or selling a business, where do you look first? The accounts, of course.
So – Do you really need an accountant? The short answer is yes. Whether you use an accountancy service on a regular basis or just whenever you need one, always have an accountancy service available. They can do the critical, must-get-right work for you and save you a lot of time and money.