Tax season: it always creeps up on us quickly! Many small business owners dread that time of year when tax season rolls around, but it doesn’t have to be that way. One of the best ways to make tax season a breeze is by enlisting the help of an accountant.
Accountants are skilled professionals who can help your business with a variety of financial tasks, and they are especially helpful during tax season. Not only can they provide advice on how to best file your taxes, but they also save you precious time and money that you would’ve spent doing them yourself. But how else can accountants benefit your business? Below are a few tips on when the best time is to hire an accountant:
Writing your business plan
If you are in the midst of writing your business plan, there’s a good chance that your plan will involve financial planning. An accountant can use special software to help you include financial projections and other reports to make your business plan professional, realistic, and more accurate. This also helps your plan to be financially solid right from the start, rather than having to make adjustments later.
If you feel like you are losing track of who owes you money and how much, it can only spiral into a more complex issue as time goes on. Luckily, an accountant can help you manage and organize your day-to-day finances so that they are not so overwhelming when tax season or the end of fiscal rolls around. An accountant can also help provide key business metrics, manage payroll, and produce tables and graphs that help display your business’ financial status easily.
When you are determining your legal structure
Depending on your company, you might have one type of legal structure or another. You may do business as a self-employed sole proprietor where you invoice everything under your own name, or you might have a limited liability business instead.
With the first option, you may be able to offset some living expenses against tax, but you could be personally liable for any business-related obligations. With the second option, you are better protected against liabilities but your business assets might be at risk. Before deciding which one best suits your business, you should consider your needs carefully and consult an accountant.
When dealing with the government
If your business is getting bogged down by government paperwork during tax season or at other times, it’s probably time to hire an accountant.
An accountant can help with government paperwork for things such as: completing and filing required legal and compliance documents, keeping your business up to date with the latest tax laws, maintaining records or directors and administrative personnel, organizing and recording share or stock allocation, and managing payroll and employee tax forms. Preparing these documents correctly (especially tax forms) can save you and your business a lot of hassle in the long run.
If you are being audited
Although it may be unlikely that your business will be audited, it can happen to anyone. And when your business is audited, it can be stressful and time-consuming to gather all of the required information. If you don’t have an accountant, this is one of the most crucial times to hire one.
They will give you advice on the auditing process, ensure you don’t violate any tax laws, and (if you hire them before the audit happens) they can provide you with audit insurance. Audit insurance covers any fees that your business may have to pay related to the audit process.
If you are applying for a business loan or overdraft
If you are looking to apply for a business loan or overdraft, banks like to know that they will get the money back that they lend. Your business needs to have a strong business case for your application, and an accountant can help build up this case. Even the fact that you have an accountant may help your business secure a loan more easily.
When you are ready to delegate
Many small business owners take on multiple roles in their business, and they pride themselves in infusing a part of themselves into every aspect of their business. But at some point, small business owners can become overworked, burnt out, and stressed. When this time comes, it may be time to delegate some of the business responsibilities to others, including financial matters. Some of the most successful business people are great at delegating, and many of them use accounting services as part of that.
If your company is growing
If your business is growing, there is no guarantee that it will grow at a steady rate. Large projects, new clients, and new employees can cause a need to grow your business operations quickly. An accountant can help you handle transitions from bringing on new employees to acquiring more office space. Helping to manage the financial details of these transitions can leave more time for you to focus on the bigger picture.
If you are buying a business or franchise
Some of the most popular ways of starting up a small business are taking on a franchise and purchasing an existing small business, but both of these options come with their own risks. If you are wondering if it’s worth it to enter into a franchise agreement or if an existing business is worth paying for, an accountant can look through franchise contracts and help perform due diligence to make sure you are making a solid investment.
Before you sell your business
Selling your business can be a big move, and you will want to make sure that all financial records and account statements are in order. Not only will prospective buyers want to see these records, but they also may want to see metrics and graphs that show your company in a positive way. Your accountant can also help facilitate the due diligence process, which is a legal requirement for when a business is being taken over.
Tax season or not, an accountant can be a valuable addition to any business in many of the above circumstances. You are the expert at running your business, and it’s likely that your attention is needed in many places at once. Let an accountant take some of the weight off your shoulders so that you can focus on other important parts of your business.