A good accountant can save you from bad decisions, pitfalls and unseen dangers. Many small business owners think that once they purchase accounting software, they no longer need their accountant. Bad accountants aside (we have all heard the news stories), a good accountant can be your superhero. While accounting software can help you invoice, track inventory, manage customer data and pay bills, the best accountants can see things you might not and help you prepare for tax time, auditors and potential investor requests.
Accountant Superhero Powers
See Into the Future
Though accounting software does include reporting tools and some forecasting capabilities, accountants can see into the future and help you plan for things such as tax payments, business slumps, major purchases and other future expenses. Despite warnings, many small businesses operate their business accounts as badly as their personal accounts and end up facing a huge tax bill. This could immobilize or even kill a small company. Accountants can help head off disaster.
Combat Scary Auditors
Accountants can help you prepare for tax time and warn you of situations that might red flag an audit. However, keep in mind that an accountant cannot represent you in tax court unless they are also a Certified Public Accountant (CPA). Nevertheless, a good accountant, even one who is not a CPA, can help you avoid tax disasters and potential audits. Should an audit be requested, they can help you prepare the documents you need for the auditors.
Clear Your Rose Colored Glasses
You love your business, and love is often blind. Many small business owners are excited about their company and occupied by numerous tasks that may keep them from seeing the big picture. A good accountant can look at the numbers without bias and see what really is there. They can help you see the changes you may need to make to become more viable and will tell you flat out if something is simply not working.
Have Ancient Wisdom
Maybe not ancient, but they likely have seen more than you have. Experienced accountants have been around the block a few times and have worked with numerous companies. While you may know the ins and outs of your business well, a seasoned accountant may have worked with and seen the interworking of around 40 companies. They have seen companies blossom and fail. They can be a good source of wise business knowledge to help you make better choices.
Master Building Skills
Accounts know how to use the accounting software you are using. They can help you set up your chart of accounts and customize the software to best suit your business. It is a good idea to consult with your accountant when you first employ new accounting technology so that all the accounts are set up correctly. They can also help you set up the right kind of reports to run, and set permission levels.
Power Block Bad Decisions
All business owners make bad choices, even potentially long-term damaging choices. Some bad decisions can be avoided or at least carried out in a better way. For example, if you have been using your personal account for business expenses from time to time, your accountant can help you do it in a way that will count as a qualified business expense with tax advantages rather than just an outright lose or messy tax situation.
Protect You from Thieves
Unfortunately, there are thieves among us. Some reports relate a median loss to fraud as high as $200,000 per year for small businesses. It can even be little things that slowly add up that you don't notice. You could have a slow leak headed out the back door and not even know about it. In fact, accountants sometimes are the culprits. For some, access to the books is too much temptation. Now and then, it is a good idea to bring in someone new to audit your books to make sure that no one is sneaking a little cut off the top.
Find Magical Sources of Funding
Accountants can help you get the paperwork together that you need for potential funding sources and their auditing teams. Since investors are part owners in a sense, you can't blame them for wanting to see the books. A good accounting team can help you prepare for an outside audit and will assist you to prepare for things such a special licensing requirements and if all goes well, even taking your company public someday.
The best accounting software saves time, helps make your books more accurate and collects the information you need for tax preparation. However, in most cases, it would be unwise to use software to replace your accountant. Accountants do not have to be expensive, and in fact, they should save you money in the end. Many accounting firms offer accounting services tailored to what you need. However, do your due diligence and put some research time in before you hire a new accountant. Just like the comic book world, the accounting world includes good and evil superheroes, so take the time to find a good one.