An accountant can cost hundreds of dollars. Many entrepreneurs manage their own financial statements and taxes to save on such expenses. It may be okay to operate without an accountant if your finances are simple—i.e., little-to-no expenses and only receiving lump-sum payments.
However, a good accountant is a must-have once complexities such as equipment expenses, subcontractors or employees, and monthly fees come into play. Overall, outsourcing bookkeeping and tax requirements can save your business time and money and ultimately make your company or practice more profitable.
Save time from bookkeeping
Accounting firms commonly provide bookkeeping services that help your business track incoming and outgoing dollars. Although you can do this yourself, it’s a tedious and repetitive process that takes time away from other activities, such as pitching new clients and customers.
As businesses get busier, bookkeeping is often the first thing that gets outsourced. The cost of bookkeeping may be insignificant compared to the hours you save from outsourcing.
Bookkeepers and accountants also provide advantages aside from saved time. An accountant who manages your books understands whether your expenses and profits are “normal” due to their experience with other clients. They can warn you if your financials begin to look unhealthy and advise you on how to move forward.
Where an accountant shines is often in their tax expertise. There’s plenty of tax preparation software that can help businesses file their taxes, but they can’t compare to the experience an accountant brings.
A good accountant has worked with other business owners — many of whom are in the same field as you. They know what expenses can reduce your tax burden and the most efficient ways to plan your tax liabilities. Tax software, in contrast, doesn’t understand your full business context and can’t provide such detailed tax planning advice.
Accountants can ultimately save you more money than they cost. Even if your business or freelance practice is a “side hustle”, advice such as registering for an HST/GST number at the right time can save thousands of dollars.
Although employed individuals have relatively straightforward tax returns, business owners and freelancers don’t. Therefore, doing taxes yourself can take a substantial amount of time. It would likely include Googling different tax and accounting terms and trying your best to wrap your head around depreciation rates and paid-up capital. Relying on an accountant who already understands these concepts can, therefore, be much more efficient.
Business growth advice
Accountants work with a lot of businesses and freelancers. They’re often a terrific source of general business advice, not only for tax and accounting. Your accountant can advise on how to set up a business or change your corporation’s legal structure. They also understand how to file the correct papers for a corporation and explain the obligations of different business structures.
Working with an accounting firm also provides benefits due to their network of clients. For example, if your business is growing, and you need a new corporate lawyer to draft sales contracts, your accountant may have a client that provides these services.
Getting a mortgage, loan, or investor
If you’re a freelancer looking for a mortgage, it may be challenging. Lenders may not entirely trust the financial statements you provide. That’s why they commonly require accountant-audited financial statements, so lenders feel safe trusting the financials you present. This is also true for freelancers and/or businesses applying for other loans or investments.
A good accountant can advise how to maneuver so that your financials will be ready for any lender or investor.
Like a great idea or reliable employees, a good accountant is valuable to your business. Although their services may be expensive, it’s a worthy investment that’s sure to provide a return.