When starting your own business, it makes sense to do much of the planning and organization yourself. You can save money while building the kind of business model you envision. But when it comes to the financial side of your business, you will be better off hiring a professional accountant.
Avoid Making Mistakes
Even if you have some background in handling finances, it’s not difficult to accidentally make mistakes that can hurt you in the future. Starting a business is complex, and keeping track of every detail of banking activity, income, expenditures, investments, taxes, and deductions takes time and mental energy. If you have employees, it can be even more complicated.
A professional accountant can set up accounting systems that can advise you on how to avoid the most common missteps, such as not separating personal and business income. Accountants also know the latest accounting software.
Help You Make Smart Tax Decisions
An accountant can also help you make smart tax decisions, beginning with how to structure your business to minimize your tax liability. Ask your accountant if an S-corp (small business corporation) can be a good solution. It not only protects your assets but also has tax benefits.
Forming an S-corp lets you save money on FICA taxes by only paying them on your salary. FICA taxes are the contributions you pay for social security and Medicare. Owners of an S-corp are taxed the same as W-2 employees. If you have employees, an accountant can set up payroll systems and deductions, and make sure payroll taxes are paid.
Setting a Budget
Setting and sticking to a budget is essential for your business, especially in its formative years. An accountant can advise you about the best way to strategize to get the most out of your money. By analyzing your cash flow, the accountant can identify potential issues or areas that can be improved.
In addition to dealing with the day-to-day financial details of your business, accountants can help you prepare for your long-term business goals. With a solid budget in place, you can be poised to scale up and grow. As a business owner, you will benefit when you leave certain business operations to the experts. A professional accountant can help you maximize your finances. It’s a smart move and ultimately, a good investment in the future of your business.
Check out this article on simple but effective ways to make your small business a success!