What accountants can do for your business and what they can’t

According to Wasp Barcode Technologies’ latest Small Business Accounting Report survey, only 40% of small business owners (SBOs) feel they are extremely knowledgeable about accounting and financial matters. So it’s no surprise that accountants rank as the most important professional for SBOs compared to lawyers, bankers, tech companies, etc.

But did you know your accountant can do more for your business besides keeping the books, paying taxes and helping you in the event of an audit?

In this part of us Our Small Business Accounting Guide offers eight new pieces of information about what an accountant can do for your small business… and what they can’t.

Don’t just get help with tax preparation, get help with tax planning

The top reason small businesses turn to accountants is to file taxes. 71% of SBOs outsource this core accounting service. However, only 30% turn to accountants for tax planning advice.

Tax planning can help you consider your tax options and determine things like when, where and whether to conduct business transactions so that your taxable income is reduced, the tax rate is reduced and some taxes eliminated.

Planning is an ongoing process. Your income and expenses change frequently, and seeing your accountant regularly can help you make the most of your tax provisions, credits, deductions, etc.

When you need advice on your legal structure

As your business grows, the legal structure that worked in the past may not be the best structure in the future. For example, 70 percent of US businesses operate as sole proprietors.

Although the easiest operation, a sole proprietorship is not enough to protect the business owner from any debt, loss, or liability the business incurs. There are also tax considerations for your choice of business structure. Accountants can help you decide which structure is right for your business today and for the future.

When Payroll Preparation and Compliance Are Frustrating You

Payroll calculation is another popular part of outsourced business finance, 50% of SBOs turn to their accountants to help with this important task. And for good reason, payroll taxes are one of the areas where businesses fail to comply the most, and fines can be costly.

Accountants can help you comply with payroll tax, government paperwork, and insurance requirements, but they can also help keep track of payroll so you can see the ratio of wages etc. to total sales. collect.

If you’re struggling with payroll or your business is growing, it’s time to chat with your accountant.

Fix cash flow

Cash flow is a fragile balance that depends on timely cash inflows and outflows of the business. However, it rarely goes in that direction. Late customer payments, unexpected expenses, poor cash management, can all have a negative impact on your cash situation.

An accountant can help you understand the cash flow trends your business is experiencing. They can track ups and downs and flows and help you predict when a cash flow crisis might be imminent and help you take steps to mitigate.

Debt Management

All SBOs have debt, but there is good debt and bad debt and your accountant can help you see the difference and devise financing and repayment strategies to help you deal with toxic debt. .

Develop a suitable budget

Budgeting is an exercise that can be difficult to master without the right help. An accountant can help you go beyond assumptions and estimates and establish a solid base of exact numbers that reflect your business goals and are easy to achieve. They can even help you eliminate unnecessary expenses.

Your budget is the springboard for you to understand how much you can afford to pay yourself, what you have to invest in, and the true costs of running a business — don’t overlook the importance of budgeting properly.

Prepare your business to grow

Growing your business comes with all kinds of financial impacts. Can you afford to hire and train new employees? What type of job function is ripe for a recruitment investment? An accountant can help look at the big picture and work out the rental costs and advise what you can afford.

Growth does not come without capital. A good accountant can also help you put together the books to support your loan application and make you a trustworthy and solid borrower.

Help with Accounts Receivable / Accounts Receivable

When surveyed, 51% of SBOs said accounts receivable and receivable are the top accounting challenge their business faces. Unsurprisingly, our survey found that 64% of small businesses are waiting for late payments, with 48% net-30 invoices being paid late, 45% net-60 and 35% net-90.

Pursuing these payments is a time-consuming challenge, and many SBOs simply don’t have the time or the time to move the needle in attracting customers, especially brands. big, pay. If you don’t manage receivables, you face cash flow problems.

Accounting firms can help you deal with unpaid bills by helping you set up an invoice system and automatic payment alerts for overdue invoices. Usually, this involves setting up you cloud accounting software like QuickBooks, FreshBooks, Xero, etc all of which include dashboard features to help you quickly see what’s infringing and take action. Automate reminders for customers.

If you’re still struggling with late payments, consider bill financing as a way to get the full value of your bill deposited into your bank account quickly. If trade credit and net terms are hurting your bottom line, Fundbox Pay can help.

What accountants can’t help with

As your business grows, chances are you’ll need more than one bookkeeper.

If you have shareholders or a board of directors, you may need to hire a controls so that you practice sound financial practices to protect your business and its assets. Controllers handle tactical tasks such as managing accounting staff and can be hired part-time or as a consultant.

If you need help managing the larger financial issues of your business, you may need the help of Chief Financial Officer (CFO). An experienced CFO can steer the business towards profitable initiatives (such as entering new markets, merging with another company, streamlining operations, etc.) and the risks and costs of doing so. Wondering if you need a CFO? We’ve got you covered.

Fundbox and its affiliates do not provide tax, legal or accounting advice. This document has been prepared for informational purposes only, is not intended to provide, and should not be relied upon as tax, legal or accounting advice. You should consult with tax, legal and accounting advisors before engaging in any transaction.