With an accountant by your side, you can reduce your 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 can become twice as difficult when it comes to credit card processing.
So do you really need an accountant for your business? Below, we answer all your important business and accounting questions.
What companies need an accountant?
Companies with complex financial systems need an accountant. These 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 does hundreds or thousands of transactions daily, an accountant will help you sort out your income and expense reports. Accountants are trained for this type of work, so those bulky financial documents that seem impossible to understand will be a piece of cake for them.
When is it okay to do it yourself?
Not every business needs an expert accountant or powerful accounting software to audit finances and balance the books. If you feel competent enough to get the job done, here are some instances where you’ll excel.
you are self employed
Freelancing often generates an average amount of income. This makes it easy to manage finances, regardless of whether you accept cash or online payments. Standalone accounting software is also available if you’re worried about making mistakes in your calculations.
Your tax situation is simple enough
If you are a small business with low volume transactions, you can easily do your own taxes. Having credit card processing software can also help clear up your taxes. Many of these software products can perform tax calculations from the sales you make and generate the necessary reports.
Your business is just a hobby
Building a business out of a hobby is a privilege many people don’t get in life. With so much passion put into running a store, whether online or offline, doing your taxes won’t be a hell of a chore. Also, you can always use an accounting software if you feel burnt out.
What are the advantages of using an accountant?
The biggest benefit of hiring an accountant is that they will help you comply with the tax laws in your region. Accountants excel at calculating and classifying finances, and with their help, you can minimize tax errors that can later cause legal problems.
Accountants are also wonderful business advisors and are 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 glad to know that accountants also specialize in financial security. Your business records must be protected by all means and your accountant can help you stay up to date on all modern cybersecurity systems. For example, they can advise you on how you can better protect your customer data and third-party credit card processing software.
Having an accountant also saves time. You may be completely in tune with running your business, but managing your finances can quickly become overwhelming. Get an accountant and they will spot all your financial problems within a few hours.
At what stage of your business should you hire an accountant?
At the grassroots level, businesses don’t need an accountant. However, as your business grows, you will need someone to watch over your precious coins. If your annual gross sales are over $250,000 or if 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 through digital wallets. As we mentioned earlier, payment processors can automatically calculate your sales and produce reports. However, if you are doing high volume transactions, these reports can be quite complex to understand, so ultimately you will need an accountant.
Finally, consider hiring an accountant in case you are audited. Your accountant will help you navigate the audit process and make sure he doesn’t violate any tax laws afterwards.
Accountants can prevent you from falling 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 to manage your finances, keep doing what you’re doing.
There will come a day when you will need a professional to take a look at your tax management and payment processing systems and hopefully all goes well.