By Dr. Chandra Bhansali, CEO, AccountantsWorld
Let’s be honest: most small business owners like yourself are experts on your businesses, not your finances. Yet 40 percent of business owners still do their own accounting. It explains why more than a quarter of entrepreneurs in a recent survey have admitted to making a big financial mistake.
It’s difficult to completely understand the meaning behind company stats when you’re busy with other things like staffing and inventory management. This is where an accountant can help beyond the typical tax season visits. Accountants focus on one thing: your business’ financial health. They translate the numbers behind your business to help you better manage and grow your company.
That’s why it’s important to find an accountant who uses cloud-based accounting software. With cloud-accounting tools, both you and your CPA can share, update and view data in real time. This gives you the right amount of control and visibility, and instills a checks-and-balances system to prevent any mistakes. Your accountant can then focus more on providing you proactive financial advice instead of spending hours correcting errors.
So, what does this mean for you? Here are three ways you and your company can benefit by working with accountants year-round.
Discovering New Growth Opportunities
The best accountant-entrepreneur relationships stem when you think of them as business partners, not another vendor. Working together beyond March and April, accountants can keep an eye on your books and manage your company financials. This gives them a deeper understanding of your business, which enables them to help you make and keep more money. You’ll receive more actionable insights on topics like tax deductions, budgeting and revenue projections. Most importantly, with a better knowledge of your books, accountants can find new areas of expansion to help grow your business.
Expecting the Unexpected
Many business owners have a vision of where they want to take their company, but few have fully baked plans. According to the U.S. Bureau of Labor Statistics, only 50 percent of small businesses survive their first five years. It’s a daunting statistic, especially when you first start a company.
This makes it even more important for you to map out a path to success. Accountants can revise your business plan to help you maintain a steady cash flow during the slow seasons. They can even develop contingency plans for unexpected problems. With a strategic partner at your side, you can improve your chances of surviving through difficult times.
Minimizing Inefficiencies to ensure survival and growth
As a business owner, money is constantly churning, whether it’s from an increase in revenue or more spending to manage inventory. That makes it hard to pinpoint what’s draining your resources.
While a lack of a new business pipeline is an important cause for business failures, cash flow is a bigger contributing factor. According to a US Bank study, 82 percent of businesses fail because of poor cash management.
Working with an accountant enables them to monitor your cash flow and share timely advice about your business. By reviewing your invoices and other financial data, they can point out a slow collection of receivables and optimize the scheduling of bill payments. Additionally, accountants can alert you of unnecessary spending, minimize costs and recommend other ways to maximize your finances that you might not have considered.
Running a business is hard, and finances and bookkeeping are often the worst part of owning a business. Despite being known for tax season prowess; accountants can do much more than file tax returns. By partnering with the right accountant year-round, you can discover new growth opportunities, prepare for unexpected risks and minimize any inefficiencies.