Have you put off looking at business accountants and have been doing all of the work yourself? This is not a bad idea when your business is small and the consequences are lower compared to when the number gets really high. Also, learning the basics yourself is a good way to improve your understanding of how a business functions in terms of cash flow.
However, business accounts bring a lot of advantages to the table, and are a required hire if you want to scale, pay the correct taxes, make the right re-stocking orders, and much more. In this article, we’ll share the top reasons why hiring a business accountant is a smart investment for your business.
1. Reduce Workload
When you first start and the business is small you may feel like you got enough time to do everything yourself. However, there comes a point where you’ll be the bottleneck for your business if you don’t outsource.
Hiring professional accountants helps take the workload off your shoulders, so you can get on with other tasks that make money. This could be product development, looking for more clients, or improving your branding. Each of these tasks can yield more results for your business instead of figuring out the numbers behind the scenes.
2. Improve Cash Flow
It’s important for your business to have good cash flow to ensure that you can pay for all expenses. This includes commercial real estate rent, employee wages, stock, and much more. If you have cash flow problems, then your business could grind to a halt, and it could go bankrupt.
Therefore, the work a business accountant does could be the difference between business success and failure. Business accountants have the skills to manage your cash flow so that you have as much cash as is needed. They can provide recommendations and give you a warning when you might need a boost to your cash flow to avoid problems stacking up.
3. Inventory Management
Some accountants also provide insights into how much stock to reorder based on your sales velocity and cash reserves. Their suggestions can help you avoid going out of stock or ordering too much stock, which can tie up your cash flow in slow-moving inventory.
Ideally, the accountant will have experience in your industry, so they can make better judgment calls about how much inventory to order. They are in charge of your business finances anyway, so it makes sense to give them the role of predicting how much stock should best be ordered.
4. Sustainable Growth
Accountants can help grow your business sustainably so that you’re not over-stretched in any one area. For instance, they can look at what business processes are operating efficiently from a financial standpoint. Getting these right when the business is small lays the foundations for growth.
Also, accountants can anticipate potential bottlenecks and problems that might arise when a business scales. That’s especially true if they have experience with scaling other businesses. Therefore, before hiring an accountant, you should consider the experience they have managing similar businesses.
5. Trends and Regulations
There are a lot of rules and regulations to running a business, and in some industries the regulations are stricter. For example, in the food industry, many regulations exist around making sure the food is of good quality and edible. Also, your premises must meet hygiene standards.
Accountants can stay up to date with these regulations and help your business implement them. They might have expertise with regard to your regulations if they already have clients in that marketplace.
Knowledgeable accountants will also know of what trends are important in a specific industry. Therefore, they can provide advice to ensure that your company is moving in the right direction. Hence, you can improve sales, develop the right products and position your brand to resonate with the audience.
6. Payroll
Payroll is a massive component of any business that has employees, and outsourcing the work to a trusted accountant means that you can improve the performance of the department tenfold. Here’s some of the important work business accountants can do when it comes to payroll:
- Pay employees: any respectful business will pay their employees on time. This means having good cash flow management and ensuring that fast payment methods are used. Also, employees like to get paid in different ways, and an accountant can help with this process.
- Taxes: paying taxes is an important part of business to avoid getting into trouble with the Inland Revenue Service. Making sure the taxes are paid probably can take a lot of education, which means that outsourcing the work to an accountant is the best choice. Also, they could improve your tax situation, so you have a smaller amount, which will improve the profitability of your business.
- Payroll compliance: there are many payroll compliance laws that must be met to ensure that your business functions legally. Otherwise, you’ll be in trouble with the law, and that could force your business to close because of fines.
7. Measure Business Performance
You might have had situations where your business is operating with good profit margins but you seem to run out of cash. Things like this can happen to inexperienced business owners because the devil is in the details.
Hence, business accountants can help measure performance by paying attention to the correct metrics. They can present this information in a way that makes sense and even give you an explanation of how to interpret them.
Final Thoughts
Overall, the advantages of hiring a business accountant shared above can make a massive difference to your business. In fact, it can be the deciding factor for growing your business by getting more sales and improving financial optimization across the board.
However, you should take the time to invest in a good quality accountant since they will be an integral part of the company. Also, you’ll need to decide between a solo accountant and an agency.
