When it comes to the success of a business, hard work and dedication do count. But the real responsibility is on the person who takes care of the accounts. Earning money is the real motive of any small businessperson, but running the business efficiently, keeping the money constantly flowing through all the aspects of your business, and maintaining the accounts are the tricky parts.
Do you know Phil Knight? Or his brand, Nike? You surely do. Phil Knight is the co-founder of Nike and its ex-CEO. Phil Knight was an accountant who formed the company and used the income to take the company to the top of the chain.
Warren Buffet, a great financial mind, said that ‘accounting is the language of business.' Business owners can make a lot of money through their hard work and marketing, but being accountable for all the money you earn and spend, gives you control over your business. Proper accounting has many perks for your business, but some businessmen take it lightly and fail to unlock the true potential of their business. Misconceptions about accounting, like the ones mentioned below, force people to take back their steps from hiring a professional accountant.
1) Accountants ONLY Do Taxes
This is a misconception in the minds of more than half of Canadians. People like to believe that accountants earn everything for the whole year in just four months of tax season. It is untrue. Accountants spend a majority of their early adolescence studying different sectors of the business world and learning the rules and regulations to tackle business emergencies and to steer the money flow in the right direction. A small business accountant can be a financial advisor, a problem solver, a bookkeeper, investment tracker, and a lot more.
2) An Accountant and a Client Must Live in the Same Town
Thoughts like these emerge from the minds of simpletons who have failed in keeping up with technology. That is rude but true because the emergence of a fast-paced technological era knows no bounds in connecting people on two different sides of the world. It is true that not all people can be trusted with money, but it does not mean that you cannot find the right accountant. Online measures can always be used to send documents to your accountant through a safe and legal web platform.
3) Small Businesses Don’t Need an Accountant
In economics, there are two terms called ‘macroeconomics' and ‘microeconomics.' Macroeconomics deals with the household finances of common citizens, whereas microeconomics deals with national and governmental expenses. In the same way, accountancy not only deals with rich people problems but also has the small pins of the wheel to make the smallest of businesses highly efficient and fruitful. The benefits of hiring a professional accountant for a small business include - easy tax returns, directing the finances towards the needs of the business, differentiating personal and professional accounts, and problem-solving for your business. Also, most big organizations have an in-house accounting department, something that most small organizations don’t have. Therefore, it becomes even more essential for small business owners to hire an accountant.
4) You Can Co Accounting if You Can Do Math
Accountancy involves the common calculations of mathematics, but that doesn't make it an easy process for anyone with a calculator. Accountancy is a process that includes gaining knowledge about a set of accounting laws and complying with them to make a report of your business. You cannot just add up your money and show it on a sheet. There has to be a proper analysis of the given data after which the accountants break down your transactions into arrays of entries and apply certain calculation methods to show the exact financial position of the business. Mathematics is the language of the universe, but the language for business is accountancy. And if you don’t know this language well, you will have to hire an accountant.
5) Outsourcing Accountancy is Loss of Control
Remember the high school test questions about several men doing a job together to accomplish it faster. Well if not faster, then delegating different tasks to several people leads to more efficiency and decreases the amount of effort on every person. There is a common misconception among people to have an internal accounting team rather than outsourcing it to be in-the-know of your business’s financial status. But outsourcing a company's accounting also provides you with the financial information about your business as the professionals keep you in the loop at every point. When you outsource accounting, there are more important things related to your business that you can add to your priority list. A small business accountant can take care of your balance sheet, while you can balance your work and employees.
6) Outsourcing Your Accounting is a Security Concern
No one wants their business plans to be revealed to a rival. The account-related and financial documents of a company are the most cared for as they contain the premonitions that you can make for the future of the company. Accounting firms are bound to legal privacy policies that forbid them from sharing critical information about their client's business. So, you can rest assured that the secrets of your company are safe with your small business accountant.
Now you know what the myths have in common. It’s ignorance of the facts of accounting and bookkeeping. Accountants are skilled people who can utilize the proper calculation methods and use the laws of accountancy wisely to get you out of trouble — hiring a small business accountant? It’s an easy task. While you take care of the primary transactions and services of your business, your accountant will get you through all the steps necessary to use accounting for the welfare of your business. If you're a small business with a considerable income, you should utilize accountancy to initiate a constant growth cycle.