As most business owners will testify, starting a new business is not the only challenge they will face. As data from the Bureau of Labor Statistics reveals, approximately 20% of new businesses fail in their first year so ensuring the long-term survival and success of a business requires a considerable investment of time, money and resources.
To achieve continued success in the competitive world of business, entrepreneurial flair and ambition can only take you so far. Without a solid grasp of your business finances, such success will be short-lived so it is vital to have an expert on board who can navigate technical details such as your business expenditure, taxation liabilities, cash flow, overheads, payroll, and more.
Not only will this ensure your business remains compliant with all relevant tax regulations, but it will also leave you more time to concentrate on other areas of your business where your talents and interest are most suited. This article will look at some of the benefits that an experienced accountant can bring to your business.
Your Business Plan
A business plan is one of the most important documents you need when setting up a new business. This document will help you set clear goals and focus on the steps needed to achieve them, both in the short-term and long-term. A business plan is especially important when it comes to financing your business as investors will want to review this document to gain an understanding of your company’s objectives, business strategy and financial plan.
A good accountant can help you with this process by objectively evaluating your business plans, and advising you on the viability of your business, along with the resources needed to achieve your goals. They can also help you with funding strategies and loan applications needed to raise the necessary capital to get your business off the ground.
One of the first decisions you will make as a business owner is deciding on the best legal structure for your business, whether it be a partnership, sole proprietorship, or a limited company. Your accountant can advise you on the best legal structure for your business which will determine matters like your personal liability, tax rates, paperwork requirements and more.
Managing Your Cash Flow
An accountant can help you identify any weaknesses in your business that could cause possible cash-flow problems. Positive cash flow is essential for any business as it ensures it can meet its financial obligations as they arise as well as reinvest in order to grow and expand.
Without this, a business may be unable to pay its employees, meet its debt repayments, and pay its bills. Poor cash flow can result in a business losing its suppliers, eroding its competitive advantage and may even lead to the need for a Chapter 11 bankruptcy lawyer to negotiate the terms of their repayments with their creditors in order to keep their business alive.
An accountant can help your business improve its cash flow in numerous ways, such as by identifying and reducing unnecessary expenses, optimizing tax reliefs, reviewing and raising prices, collecting overdue accounts and through better financial forecasting.
Taxation is an important part of any business and an accountant can help to ensure it complies with the relevant tax laws and that tax returns are filed correctly and on time. An accountant can give you the reassurance that your business’ tax affairs are in order that you are paying the optimum amount of tax each year. By taking advantage of all available deductions, credits, exemptions, losses and incentives, an accountant will ensure your business is complying with its tax responsibilities in the most tax-efficient way possible.
As your business grows, you may choose to expand your operations by opening another office or hiring more staff. The strategic guidance offered by your accountant can help you when it comes to making important growth decisions.
You may need to arrange a bank loan or secure private investment in order to fund these initiatives. To do so, you will need to present a strong business case, which demonstrates the financial health of your business and its ability to make an appealing return on its investment.
An accountant can create the necessary information and reports third parties need to assess your business and can also help it react effectively and quickly to unexpected growth without cash flow or other financial problems arising. An accountant can also help you to evaluate the viability of a merger, managing the financial aspects to ensure it goes smoothly.
As this article shows, there are several business benefits to hiring an accountant that can contribute to and ensure the lasting success of your business.
Founder Dinis Guarda
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