Small businesses must constantly juggle competing priorities and make the tough decisions on where to allocate valuable resources. In an uncertain economy, most struggle with where to spend and where to cut. Most small businesses can’t afford to have a full-time accountant on staff, and while some owners may have solid working knowledge of the day-to-day bookkeeping or accounting needs of their businesses, many rely on the expertise of a designated accountant only during tax season. Once tax season is over, many of those same small business owners will likely go back to managing their books on their own. ‘
What many small business owners probably don’t realize is the value that comes from building a relationship with an accountant on a consultative basis throughout the year. An accountant can serve as a trusted advisor who can offer invaluable counsel to take a business to the next level, or even just assist in navigating through an uncertain economy. Accountants bring knowledge, experience, expertise and a perspective that can help build a plan to turn business ambitions into reality.
Here are seven reasons that all small business owners should keep in mind when deciding whether an outside accountant is a fit for their operation.
1. Business owners using an accountant report the service is key to their success. In an accountant usage study conducted by Sage among Canadian business owners, 90 per cent of respondents agreed that working with an accountant was a critical element of their success.
2. Accountants can bring your financial information to life. If all your data is just “sitting” in a database and you’re not interpreting, analyzing or using it to help drive your business direction and decisions, then you’re missing out on a great opportunity. Have an accountant help you dive into the numbers and use them to propel greater business growth and profitability in the future.
3. Accountants can provide a new perspective. Sometimes small business owners are so “in the weeds” running the day-to-day operations of their business that they may not be able to see the whole picture. Someone who is removed from the business can provide a different perspective that may otherwise be missed. Meeting with an accountant can be like taking a step back, looking at the bigger picture and gaining a fresh, new perspective. Sometimes that’s all it takes to come up with the next big idea.
4. Accountants have reach. Don’t underestimate how valuable it is to receive guidance from someone who has insight and knowledge across hundreds of businesses and industries. Accountants not only get to see the financial information of many businesses across a variety of industries, but they also have visibility into best practices that are working for other businesses as well as the mistakes others have made that have led to failure. Being able to have this insight and share information on what has or hasn’t worked for others is invaluable – why reinvent the wheel if you don’t have to?
5. Businesses need a plan. One reason thousands of businesses fail every year is because they didn’t have a plan. In fact, 23 per cent of respondents in a recent survey bySage affirmed they don’t have a formal business plan in place. When asked why, they said, “I just didn’t know where to start.” This is where an accountant comes in. A good accountant will partner with a business to look at all the data and help build a roadmap to success. Poor planning isn’t necessary, but bringing a professional on board can help small businesses plan for success.
6. Accountants understand tax. No matter how you slice it, taxes are not always easy and straightforward. Rules and regulations change on an almost continuous basis; aligning with an accountant can help ensure that your business remains compliant and is a critical step in maximizing your tax savings. Many small business owners who have relied on the expertise of an accountant will point out that that the tax savings they realized by working with a professional have paid for the accounting fees 10 times over.
7. Accountants can be critical to getting through an audit. If your business has ever been audited by Revenue Canada, you probably know that the ongoing assistance of an accountant can turn the usually frustrating and daunting experience into a much easier process. Participants of Sage’s accountant usage studies also agree – 84% of respondents said working with an outside accountant during an audit was very helpful.
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Can your business survive without the assistance of an outside accountant? Probably. But the extra insight, guidance and expertise offered by an outside accountant can be the catalyst that could make your business thrive.