Professional Accounting Services: Why Every Business Needs It
Accounting may seem like a simple enough task for a multi-talented business owner, but one seemingly minor mistake could result in hours of lost time, incorrect balance sheets, and real tax filing headaches. As such, professional accounting services are beneficial to entrepreneurs of all experience levels — especially those in the startup or growth phase of the business lifecycle.
Below, seed , CPA discusses the benefits of working with an accountant — whether you’re getting your business up and running, preparing for the tax season, or need help managing your day-to-day bookkeeping tasks.
If your small business is in the seed or start-up stage, it may seem unnecessary to pay for accounting services so early on. But this is when you can really benefit from the advice of a financial professional. An accountant can help you choose the right legal entity for your business, understand your tax responsibilities as a business owner or entrepreneur, and avoid common pitfalls that could prevent your company from achieving success.
An accountant can help you with common startup tasks such as:
- Forming a business entity.
- Helping you apply for and obtain an EIN (Employer Identification Number) to identify your business for the IRS.
- Writing a business plan.
- Applying for small business loans.
- Identifying potential tax deductions for small business owners.
Whatever questions or concerns you may have about starting a business, an experienced accounting professional can help to address them — and guide you in the right direction.
As a small business owner or entrepreneur, bookkeeping is just one of your many daily responsibilities. But when you’re busy learning everything there is to know about running a business, your daily bookkeeping tasks may fall through the cracks, which could put you at risk of an IRS audit, affect your cash flow, and increase your chances of missing out on potential tax write-offs.
With professional bookkeeping services, you can expect to receive assistance with everything from managing your cash flow to reconciling your bank statements each month. In addition to working with a professional bookkeeper, you can use software to easily manage your business finances — and keep things nicely organized for your accountant. Not all accounting software systems are created equal, however, so it’s important to find the right one for you.
Home Business magazine notes that understanding your tax responsibilities can be stressful and confusing, especially as a new business owner. You need to worry about paying income taxes; self-employment tax (depending on your legal structure); and, in some cases, excise, property, and sales tax. And if you have employees, you’ll need to meet additional federal, state and local responsibilities — not to mention, stay on top of the year’s tax schedule. According to Daniel Sant, there are a number of ways that overburdened managers can make costly mistakes when it comes to payroll, including: using the wrong payroll classification, sloppy or incomplete records, and missed deadlines.
To avoid common tax mistakes, IRS audits, penalty fees, and other costly financial issues, again, it’s best to work with an experienced tax professional when preparing and filing your business taxes. You already have so many different tasks on your plate as an entrepreneur or business owner, and unless you have a good understanding of your financial responsibilities, preparing your taxes shouldn’t be one of them.
Professional accounting services may seem unnecessary when your business is just starting out, but the financial decisions you make today could affect your business for months or years to come. Start off your business on the right foot by investing in professional accounting services and the best tools. You’ll save time and money in the long run, and you’ll have more bandwidth for the business-related tasks you truly enjoy.