7 Ways Accounting Can Help Your Business Succeed

Times are especially uncertain right now due to the pandemic, and small business owners are probably spending most of their day thinking about how to make their small business succeed. Most businesses are on a budget, and it is critical to figure out where you can cut business costs and do more on your own to stretch the funds you have available. Hiring a small business accountant or using outsourced accounting services is an excellent way to make sure your business is in great financial health and has the ability to succeed.

Small business accounting can help your company succeed by giving you insights into the overall financial health of your company, offering a precise report of your cash flow, demonstrating opportunities for growth, and keeping you organized and accurate when filing your taxes.

How Can Accounting Help Your Small Business?

Since accounting is all about interpreting information about an individual or company’s finances and operations, small business accountants can be a key part of your financial advising team, helping you navigate all the important decisions that impact your finances.

Here are a few ways small business accountants or outsourced accounting services can help your business succeed:

#1. Assist You in the Loan Process

Starting a business often involves taking out a loan. Having a small business accountant who understands your financial position can help you present the purpose of the loan and consider various options for financing. Your accountant will help gather the information and data necessary for a loan, from quantifying the current financial condition and credit need to identifying repayment sources. With this data, accountants can also work with clients to craft compelling loan applications that can improve the chances a bank will approve the request.

#2. Greater Efficiency

Proper accounting offers you up-to-date financial data about your business. And that can help you make crucial decisions about the need for, and timing of, new business investments. Could new equipment make you work faster? Could it mean you deliver better service to your clients?

Accurate financial data helps you decide whether it’s the right time to invest more cash in your company and how those expenses will affect your cash flow.

#3. Managing Debt

While many small businesses carry some debt, an accountant can help you better understand the difference between good and bad debt. When you work with a local CPA, you can get rid of toxic debt by coming up with repayment strategies and get the best terms for any new debt.

#4. Create a Working Budget

Budgeting can be a tough exercise for a small business without the right guidance. But it’s essential because this is your foundation for your operations and business growth. A small business accountant can help you establish a realistic budget that reflects accurate numbers as well as your business goals. This can even help your firm get rid of unnecessary costs.

#5. Strategic Financial Planning

If you want your business to grow, you’ll need a strategic plan. An accountant can help you answer key questions such as how many staff you can afford to hire and what your sales targets should be for the coming year. You can also receive guidance regarding any additional financing needed for growth.

#6. File Your Small Business Tax Returns

Tax season can be a stressful time for freelancers and small business owners, and for good reason: filing taxes becomes more complicated when you’re self-employed. But with proper accounting throughout the year, you can lessen tax-time headaches.

There are different types of business taxes and they vary by industry and by state, but some of the most common include:

  • Income Tax: Which requires you to pay a portion of your income to the government.
  • Sales Tax: Depending on the type of work you do for clients, you might add sales tax to your invoices that you later payback to the government.
  • Employee Taxes: If your company has staff, you’ll collect taxes from your employees’ paychecks and pass that on to the government.

#7. Provide Information for Hiring

If you own a business, you know your company’s success hinges on hiring the right people at the right time. Small business accountants are perfectly positioned to help clients figure out how to grow their business with smart hiring.

By providing business owners with people-focused financial metrics each month, such as operating profit per employee and average expense per employee, accountants can help small business owners manage their greatest asset — their workforce.

When Should I Hire a Small Business Accountant?

A good rule of thumb to follow: if managing your business accounting starts getting in the way of completing projects for your clients, you should consider hiring a small business accountant. Or you might feel better working with an accountant at tax time, or to address certain questions related to your small business. Ultimately, the decision is yours.

Partner with Limitless Investment & Capital Small Business Accountants

In order to stay focused on building your business, companies need solid financial management with a dependable accounting function. Limitless Investment & Capital combines a team of experts, systematized processes and procedures, and the latest in accounting technology to ensure our clients receive the best service to support their unique business needs at an affordable rate. We don’t just handle your business accounting needs, we get it done right! Schedule a free consultation TODAY!