Growing Your Business

What Does an Accountant Do for My Small Business?  

What Does an Accountant Do for My Small Business?  

Launching a small business can be one of the most exciting, stressful, and challenging events of your life. Unfortunately, approximately 90 percent of start-ups fail. If you're a small business owner, securing the support of an expert accountant will likely increase your odds of success. Besides providing the obvious tax and compliance services, accountants help small business owners with complicated problem solving and strategic planning tasks. Hiring an expert accountant can help your small business in the following ways:

 1. Establishes Benchmarks

Benchmarks, also referred to as best or exemplary practices, are goals to aim for. Your accountant can help you establish vital benchmarks based on standards within your industry. These indicators can highlight areas where you need to improve. By providing employees with measurable goals to achieve, benchmarks are great motivational tools.

2. Develops Key Performance Indicators

Besides benchmarks, your accountant can develop key performance indicators (KPIs) for your small business. KPIs are specific measurements utilized to assess performance. Popular KPIs small business owners track include:

  • Gross profit margin as a percentage of sales
  • Inventory turnover
  • Accounts payable turnover

Think of KPIs as steps along the way to reaching benchmarks. They measure your progress toward your benchmarks. KPIs can assist you with planning and evaluating employees.

3. Provides Cash Flow Solutions

Both new and established small businesses fail due to cash flow problems. If you’re slow to collect payments for goods or services, incur too many expenditures, or both, you can’t succeed indefinitely. Accountants understand revenues and expenses ebb and flow. An accountant can help you predict the effect of cyclical changes on cash flow and recommend strategies to overcome them. Your accountant can organize cash reserves and create a spending plan that will ensure you’ll always have funds in the bank.

4. Sources Financing

To grow your small business, securing financing is often crucial. A skilled accountant can help you create a winning presentation packet to present to lenders. This professional can also discover the most affordable borrowing opportunities for your small business. These opportunities will have the perfect balance of low interest and repayment flexibility. Your financial advisor can develop detailed financial statements and credible forecasts boasting impressive graphs and charts. Lenders will literally be able to see the opportunity on the page. An accountant can utilize proven forecasting tools lenders trust. Once you secure a loan, your financial advisor can recommend when you need to use extra cash to pay off debt and when you should reinvest spare funds in your small business.

5. Builds a Better Budget

Sound budgeting requires a time commitment. As a result, many small business owners make decisions based on inaccurate numbers. A reputable accountant can build a detailed, accurate budget. With a better budget, you’ll know your real cost of business operations. You’ll see how much money you can reinvest in your company. You’ll also realize what expenditures you can pay for yourself.

6. Automates Accounting Processes

Is your small business’s technology stuck in the last century? An accountant can save you both time and money by automating your accounting processes. For instance, an accountant can set up software that will send reminder e-mails to customers who haven’t paid for goods or services and track KPIs 24 hours a day.

7. Provides Staffing Recommendations

Do you need to hire employees, but are unsure how to go about this process? Your accountant can make invaluable human resources recommendations. A financial advisor can determine what kinds of workers will benefit your small business the most. This professional can determine if you can afford to bring on new employees by calculating the cost of hiring, training, and paying them. An accountant can also help you comply with government paperwork, insurance requirements, and tax rules.

8. Develops Internal Controls

Effective internal controls safeguard your small business assets. An accountant can develop expert internal controls appropriate for the type of small business you own. For instance, your accountant might recommend you require employees working in high-risk departments such as inventory, cash receipts, and cash disbursements to take vacations. This professional may also suggest you perform background checks on all future employees, conduct regular appraisals of key assets, and insist that a good audit trail is created for every transaction.

An experienced accountant can bring needed insight and expertise into your small business. Whenever a need arises, your accountant can help you meet it. If this professional can’t solve the problem, he or she will likely know someone who can.

share this post
Search for matches...
Frank Jenkins Jr

Frank Jenkins Jr

Frank Jenkins Jr. is the managing partner of Adams, Jenkins & Cheatham, a CPA practice based in Midlothian, VA. Frank specializes in Consulting services, tax planning, accounting, audit & assurances. "I genuinely care about our clients because I have a personal connection with them. This job requires me to multi-task and work under tight deadlines. I get great professional satisfaction from balancing firm and client commitments while building a strong team here at AJC."

ADAMS, JENKINS & CHEATHAM
0 reviews

Virginia

Recommended Professionals

In the face of economic uncertainty, TaxBuzz is the industry's most up-to-date tax information.

Join 60,000 who get our weekly newsletter. No spam.

We know tax and accounting issues are complicated.

Do you have additional questions on this topic for this author?

Related Posts

Latest Posts