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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.
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Being the owner of a small business attracts a bunch of responsibilities. While every activity in your business needs your focus, time, and effort, you can easily fall into the wrong sense about managing your business’s books of accounts on your own. You may think if you do not have a massive list of daily incomes and expenses compared to a large business, why is there a need to hire an accountant and a bookkeeper, especially a full-time one. So here are some reasons that will make you think why your business needs a full-time bookkeeper.
1) Borrow Additional Help for Day-to-day Operations
As an entrepreneur with a lot of responsibilities, you may get pulled away in a dozen different directions every day. If you are slightly knowledgeable about managing your finances, doing it on your own can create a risk for your firm’s growth. As a business leader, you need a constant focus of things that need new strategic directions, execution of major strategic decisions, building your team, and even expanding your business. With your business expansion, you could be bogged with accounting. Having full-time bookkeeper will help you to focus on the growth of the business and taking effective, solid decisions for your business.
2) Provides Consistency in Your Invoice Processing
We all know that invoicing contributes to many significant factors to your company’s cash flow. Having your invoices submitted on time on a consistent level and convenient format, you later get a lot of time to spare for payments. Without following a standard invoice processing, you can easily expose your business to the risk of having your revenue stream to collapse. Not having a consistent follow-up with the cash shortage and other problems in your invoicing system in the early days of your business can create a major issue for your business. Hiring a full-time bookkeeper helps you to regain control when it comes if there is a shortage of cash or addresses any invoice-related issues at the earliest.
3) Manages Your Payroll
Managing payrolls is another critical function that you need to consider by putting it on top of your list. When you work with your employees, you can miss a day or two to send the paycheck or correct an error if your team is small. But procrastinating the payroll issues can damage your team morale severely. To avoid the payroll issues, you need to hire the bookkeeper to establish and maintain control over it.
4) Get Your Finances Straight
You need to know that most of the successful businesses did not stay small forever. Every business needs growth. When you have successfully attracted more customers, invested in more resources, and build your infrastructure, your finance can be much more complicated to handle on your own. Handling the finances even then can make it riskier for anyone. When your business starts getting over your head, you need a bookkeeper who is aware of your business financial condition before your expansion and improves your financial situation in the future.
5) Saves Time
If you are managing your account reporting, it can take you weeks and some time from your work to work on it. On average, an entrepreneur should spend an hour every two weeks to capture and record the information. Doing your books takes your valuable time as you tend to spend more time capturing and recording the accounting information. As a business owner, you cannot afford to spend your valuable time on these things. You are the mastermind for your business, and you need to take care of the operational function and save time for what needs your time the most. A bookkeeper is an expert in its field and focuses on providing you with the best service in a limited time.
6) Helps You Keep Your Passion
Ask yourself - Did you start your business only to do your accounts? Is crunching numbers and composing financial reports what you want to do for your business? Of course not! Many businesses get burned out fast due to the overloading of the things and doing everything on their own. You don't want your business to be one of them. As an entrepreneur, you need to follow the passion that made you start your business. All you need to do is forcing out the things that can make you lose out your interest. Hiring a full-time bookkeeper will help you take over your financial aspect so that you can focus and follow your passion and the growth of the business.
7) Provides Expertise
To handle the financial accounts on your own, you need to have a background in finance. You need to have a working knowledge of accounts and taxes. With constant updating of rules and regulations in terms of taxes by the government, it is difficult to stay updated all the time. As a business owner, you have a limited time in your hands for your business. Whereas, a bookkeeper will always be updated with the tax laws and accounting rules, thus providing expertise for the financial status of your business.
8) Assists You in Your Firm’s Growth
At the start of your business, your business gains some level of stability. Growth requires you to focus on your core business needs. However, when you do all the things on your own, your pace of growth reduces. You need to pull yourself out of the tedious aspects that prevent you from pushing your business forward. Rather than looking after little tasks that can take away your focus from the core activities of your business and prevent you from using your unique business talents, hire a bookkeeper to give your business the best care financially.
Having a bookkeeper has a lot of benefits. The decision of hiring a bookkeeper depends on your firm’s needs and your preference. Book a free consultation with your nearby small business bookkeeping service provider if you live in Edmonton to help you decide and make a right path for your firm.