As a business owner, you know that success is not achieved without proper accounting and financial management. But that can be easier said than done, especially if you’re not an expert on the subject. That’s why it’s important to reach out to a qualified accountant right away.
7 Financial Problems An Accountant Can Help Solve
Accountants and certified public accountants (CPAs) are tax professionals that can solve most of the financial problems in your business. Here are 7 big ways they can help you out.
1. Writing up Financial Statements
Accounting software can help provide some insight into the financial wellbeing of your business, but you’ll need an accountant to prepare financial statements like the balance sheet and income statement. These documents offer a detailed understanding of your company’s financial health.
All businesses, big and small, should engage in scenario planning and re-examine financial forecasts for expenses, sales, and cash. Not only can this process make your business less susceptible to sudden market changes, but it can also help you adjust in poor conditions.
2. Setting up a Budget
An accountant can help you create a budget for your business and determine what factors you need to consider when making money decisions. They’ll use their experience in identifying trends and analyzing financial statements to understand the current state of your finances.
After that, they’ll establish a budget that meets all of your business needs. While you don’t need to be a CPA to write a budget, it helps.
If you’ve thought about becoming a CPA because you want to do most of the accounting work yourself, check out these CPA review courses that are considered the best on the internet. These courses can help you pass the difficult CPA exam.
3. Monitoring Cash Flow
Without adequate cash flow, a business can quickly fail. Accurate forecasting and monitoring of your cash flow is an integral part of staying on top of your finances. An accountant can provide a regular overview of your cash flow through a structured analysis of your income and outgoings.
With such analysis, you’ll have greater insight into the performance of your business. You’ll be able to track liquidity, provide forecasts, and develop strategies to keep your cash flow positive and pay your outstanding debts. A great accountant can even identify potential investments.
4. Help With Payroll Management
An accountant is essential to an accurate and timely payroll management process. Accountants can provide advice on payroll decisions, supervise calculations, process payroll information, and check payroll reports to identify any discrepancies. They typically do this while using software.
If you’re new to payroll, they can help you set up procedures for payroll automation and calculate payroll-related taxes, deductions, and credits. They can also maintain these processes as your business grows. With an accountant, you’ll streamline your payroll management, keep your employees happy and protect your business safe from any legal repercussions.
5. Staying Up-to-Date With Tax Regulations
Tax codes are constantly changing, and it can be hard for business owners to keep track of them. But when you hire an accountant, you’re basically bringing on a tax expert to the team that understands tax codes and the changes that could affect your business in your state.
An accountant can ensure you’re following all the latest rules and regulations, so you won’t be hit with hefty fines or penalties when tax season rolls around. They can also look at your previous tax returns and correct any mistakes, but only a CPA can help if an audit occurs.
6. Calculating and Filing Taxes
Nobody likes dealing with taxes, but an accountant can take that burden off your hands. They’ll calculate your taxes accurately and review your tax reports to make sure there are no potential deductions you might have missed. They can show you how to maximize your tax return.
It’s important to note that accountants can actually file your taxes with the IRS. Bookkeepers can’t perform this task, so make sure you aren’t mixing these two professions up.
A CPA can also file a tax return, and you may want to look into hiring one if you have a large business with a lot of employees. If you don’t, an accountant can calculate and file your taxes for you.
7. Helping With Strategic Planning
An accountant can offer you valuable insights on investments, potential partnerships, mergers, and other strategic decisions that can help your business grow. They’ll help you analyze the risks and rewards involved, as well as explore any tax implications of any decisions you make.
Furthermore, an accountant can help you determine the best way to allocate resources, get an overview of current and future finances, and develop long-term goals. Through their strategic planning expertise, an accountant can create a strategy that works for your financial position.