When someone decides to open a small business there are many steps involved; a few are unforeseen while some can be planned. Hiring and having an accountant at your disposal for a small business is an integral measure towards a business’ success. An accountant will help with many facets of a new business: the start up process, operations and growth. All three of these processes are extremely important for the long term success of a small business.
The start up process involves many key steps that an accountant will help you navigate. Some of them entail:
- Developing a business plan. A business plan will validate your company to investors and lenders by identifying start up costs and creating revenue forecasts.
- Help determine which structure is best for your business such as limited companies, limited liability partnerships or corporations, sole traders or proprietors
- Advice on accounting software which will help determine which invoicing system best suits the business
- Setting up a business bank account
- Tips on tracking daily expenses
- Explain important issues such as keeping business and personal expenses separate.
Business operations are the next phase in which an accountant will lend expertise. For this process they will help with:
- Predicting cash flow and determining strategies to manage different situations
- Managing debt with advise on when to pay back a loan or to reinvest in your company
- Staying up to date on tax laws. This is extremely important because it will help you to receive deserved and lawful tax deductions and credits.
- Explain financial statements
- Determine when and to whom to send W2 and 1099 forms
- Estimate tax payments. Reducing your tax bill by estimating quarterly tax payments and helping with monthly payroll taxes. An accountant can also save you money by determining your estimates so that you don’t incur additional penalties for underpayment.
- Complete and file required legal compliance documents
- Prepare annual statements
- Keep company’s status up to date in government company register
- Maintain records of directors and employees
- Organize and record share or stock allocation
- Close out books at year end
- Compile and submit taxes and necessary paperwork to IRS
- Minimize tax bill by making sure to use all tax allowances
- Audit preparation if needed
- Teach the best practice of document and receipt keeping
Growth of a business is the last phase of importance to have an accountant at your disposal. An accountant will help by:
- Reviewing cash flow patterns, inventory management and pricing will determine areas of potential growth
- Advice on property and equipment as well as leasing or purchasing
- Preventing getting audited by the IRS
- Compiling a financial forecast which would help the business generate better decisions
- Create a business budget
- Determine if the business is lucrative to sell
An accountant is beneficial to a small business for the start up process, business operations and company growth. An accountant helps take the pressure off of an owner so that the owner can concentrate on the actual business instead of the little details. If you need help with a start up business or a small or large company that already exists, please let us help you at Lee CPAs & Associates LLC. We can be reached at 847-850-5300. We wish you much success in your endeavor.