Accountants. Who needs ‘em? Well, your business, actually! Reports Bloomberg, 80% of all businesses crash and burn in the first eighteen months of operation – and one of the key reasons for that is a lack of financial planning and management skills. Read on to find out more about how an accountant can benefit your business…
Any idea which products and services are your most profitable? Can you tell your cash flow statement from your profit and loss statement? In a poll of small business owners, Canadian accounting software firm Intuit Canada found that 57% failed a short multiple-choice financial literacy test. Proper financial management and bookkeeping is essential to properly manage your business resources, and improve your odds of business success, so if you don’t have the knowledge to do this yourself, hire an accountant!
You know those receipts and assorted paperwork you stash in the glove box of your car, or in your desk drawer? That’s how not to keep good financial records! Not only does bad record-keeping prevent you from gaining an accurate snapshot of your business’s financial position but, come tax season, the lack of organisation will leave you tearing out your hair! Says SARS, retaining records will assist you in fulfilling the requirements of the Tax Administration Act and keep them happy that you’ve complied with the requirements. Enlisting the services of a bookkeeper and accountant will take the drama out of financial housekeeping!
Are you working on your business, or in your business? Entrepreneurs are, by nature, go-getting do-it-yourself types of people. But, even if you do have the financial nous, tackling it all alone is a recipe for burnout. Delegating your bookkeeping and accounting functions frees you up to focus on what you’re good at – getting out of the office and growing your business!
Don’t mess with the tax man! Your accountant can work with you in two areas – tax compliance (making sure you comply with the law) and tax planning (helping you reduce your tax burden).
Having an outsider objectively assess the state of your business affairs can provide you with the shot of reality you need to make much-needed changes. An accountant can help you determine the best business structure for your situation – for example, sole proprietorship or PTY (Ltd) – as well as provide you with a financial analysis for your business plan which can help you to, amongst other things, assess the profitability of your products and services. Having a sound financial analysis and properly prepared business plan can also help you access funding from potential investors.
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