Even if you have owned a business for many years, and have a lot of experience in various aspects of accounting, hiring a professional accountant might save you money and problems down the road. For example, you may have filed your own tax returns for several years in a row. You may be a whiz with accounting software and keep meticulous records of all your financial transactions. However, it could be in your best interest (no pun intended) to hire a professional accountant. Here are 10 ways a professional accountant could potentially save your business money:
1. Assessing deductibility.
This is one of the main considerations in reviewing your yearly expenses. Do you ever lack complete confidence in knowing whether one of your expenses is tax-deductible? Why not hire someone who thinks about these things all day? You might be wondering if you can deduct your car payment as a business expense. Or perhaps, there are possible deductions that you didn’t consider such as groceries. It may seem like a small line item on a weekly basis, but could be a significant amount over an annual period.
2. Fulfill your legal responsibilities and retain your money.
A professional accountant may be more conversant with legal matters pertaining to your business than you are. For example: what if you hired multiple family members at a very low salary with the intention of deducting their medical insurance? This could simultaneously save you money and provide excellent medical care for your loved ones. An accountant who is also an expert at tax law would be able to answer this question for you and come up with other money-saving options that are within the confines of tax law.
3. Avoid the dreaded audit.
It’s something every business fears: a tax audit. It is possible that hiring a tax professional will come in handy if your business is audited. You will want someone in your corner that has been focused on the accounting part of your business, rather than all aspects at once. Also, if your business has a particularly busy and successful period, you will be able to focus on keeping the momentum going while your accountant handles the audit.
4. Pay the exact tax that you owe.
If you underpay your taxes, you risk owing fees in the form of penalties, and if you pay too much to the IRS you might wish you’d had that money to put into your business. The person you hire can help you aim as close as possible to paying the exact tax that you owe.
5. Set up best financial practices.
You know the saying: “Measure twice. Cut once.” When you set up the right accounting methods from the very beginning, you have an excellent chance of saving time that you can use for other aspects of your business. Hire someone who has experience in setting up your financial practices correctly from the beginning.
6. You will not miss your deadlines for filing.
Many businesses miss their filing deadlines, not because of irresponsibility, but because there are just too many things happening at once. The more often filing deadlines occur, the higher the chance that your business could be late to file and incur unnecessary penalties. Furthermore, if your business is always timely with its filings, it may reduce the possibility of an audit.
7. Improve your business acumen.
In hiring an accounting professional, you will have a better understanding of how to avoid certain financial pitfalls. If you only have your own financial experience and knowledge to base your decisions upon, you may not see the whole picture clearly.
8. Use assets and property to your advantage.
Many businesses have depreciating assets that may have deductions available on the amount of asset depreciation per tax period. Or, in the case of property that is utilized for business purposes, it is helpful to know all the tax implications involved.
9. Double check your work from previous years.
Sometimes it is necessary to review accounting records from previous years. We all know how daunting a task this can be when you are heavily focused in making your business succeed in the present. It can be a great relief to have a professional available to address past issues while you continue efforts on current sales and marketing, for example.
10. Plan for future expenditures.
Perhaps you want to grow your business to multiple locations. Maybe you would like to move into new fields of service to provide to your customers, or expand your business with a higher expenditure on marketing. Whatever your future goals, your accountant can help you plan for them by advising you on which tax-free vehicles might be best for you.
Running a successful business can be stressful and incredibly time-consuming. Hiring an experienced accounting professional could save you from tax audits, IRS penalties and other unnecessary difficulties!