With an accountant by your side, you can reduce tax liability and properly plan for the future of your business.
This may sound easy in writing, but for a small business owner, it’s an extremely complicated task that may get twice as difficult if credit card processing is involved.
So, do you really need an accountant for your business? Below we answer all your important questions surrounding businesses and accountancy.
Which Businesses Need an Accountant?
Businesses with complex financial systems need an accountant. Such businesses accept credit card payments and have a high volume of transactions as well as a chain of stores both locally and abroad. Examples of such businesses include retail stores, schools, hospitals, and restaurants.
If your business performs hundreds or thousands of transactions daily, an accountant will help you get your revenue and expenditure reports in order. Accountants are trained for this kind of work, so those bulky financial documents that look impossible to understand will be a piece of cake to them.
When is it Okay to Do it Yourself?
Not all businesses need a knowledgeable accountant or powerful accounting software to audit finances and balance the books. If you feel competent enough to do the job, here are a few instances where you’ll excel.
You are a Freelancer
Freelancing often brings in an average amount of revenue. This makes it easy to manage finances regardless of whether you’re accepting cash or online payments. Freelancing accounting software is also available if you’re worried about making errors in your calculations.
Your Tax Situation is Simple enough
If you run a small business with low-volume transactions, you can easily do your own taxes. Having credit card processing software can also help get your taxes straight. Many of these software products can make tax calculations from the sales you make and draw the necessary reports.
Your Business is just a Hobby
Creating a business from a hobby is a privilege many people don’t get in life. With such passion poured into running a store, whether online or land-based, doing your taxes won’t be a hellish task. Furthermore, you can always use accounting software if you feel worn out.
What are the Advantages of Using an Accountant?
The greatest benefit of hiring an accountant is that they’ll help you comply with your region’s tax laws. Accountants excel in calculating and sorting finances, and with their help, you can minimize tax errors that may later cause legal issues.
Accountants also make wonderful business advisors and they’re not just limited to preparing tax returns. An experienced accountant can help you recognize problems in your inventory, make sure your payment processing systems are working and guide you when applying for loans.
If this isn’t fascinating enough, you’ll be happy to know that accountants also specialize in financial security. Your business records need to be protected by all means and your accountant can help you stay updated on all modern cybersecurity systems. For instance, they can advise you on how you can better protect your customers’ data and credit card processing software from third parties.
Having an accountant also saves time. You may be completely in tune with how your business works, but managing your finances can become quickly overwhelming. Get an accountant and they’ll spot all your financial problems in a few hours.
At What Stage of Your Business Should You Hire an Accountant?
At the grass-roots level, businesses don’t need an accountant. However, as your business grows, you will need someone to keep an eye on your precious coins. If your annual gross sales go over $250,000 or you have business assets worth more than $1 million, avoid managing your finances and hire an accountant instead.
Get an accountant too if your business starts accepting credit card payments and online payments via digital wallets. As we mentioned before, payment processors may calculate your sales and automatically draw up reports. However, if you’re making high-volume transactions, these reports may be quite complex to understand, so you will ultimately need an accountant.
Finally, consider hiring an accountant in case you’re audited. Your accountant will help you navigate the auditing process and ensure that you don’t violate any tax laws afterward.
Accountants can prevent you from landing on the wrong side of the law and also help you attract investors. This doesn’t mean you have to hire one today. If your business is small enough for you to manage your finances, keep doing what you’re doing.
A day will come when you’ll need a professional to take a look at your tax management and payment processing systems and we hope that it will all go well.