Small businesses, especially those just starting up, are always looking for ways to save money. Most start out by saving a bit by handling the financials on their own. Frequently it starts with a simple spreadsheet and then migrates to a software package. There are some drawbacks to self accounting.
Time – Time is always a premium when you are a business owner. The hours you spend on the books means less time for marketing, planning, and customer service.
Errors – For accountants, dealing with taxes and financial issues is their only business concern. For the small business manager, there are daily distractions. Here are some of the common mistakes when an owner deals with accounting without professional help.
Missing HST/GST registration or collection
Not taking all deductions available
Failing to account for depreciation
Missing province-specific benefits
Causing the CRA to question entries and trigger an audit
Keeping Organized – The tax and other accounting functions require a lot of back up materials. It also means handling these matters at least weekly and sometimes more frequently. If all the documents are not easily accessible, there is a considerable waste of energy.
On the other hand, the fee you will pay to an accountant will get you these benefits:
Knowledge Base – An accountant has the education and experience to easily deal with the basics of cash flow management, taxes, and other critical functions.
Keeping Tabs – An accountant uses a system to help you with bookkeeping and general record keeping. This means you have the ability to review where your money is coming and how it is being spent. It also helps you see what services or products are doing well and which may need a boost or to be dropped. These trends are frequently something an accountant can notify you about so that you can create the appropriate strategies for spending.
Taxes – An accounting firm is able to help you keep on top of all the due dates for remittances. They are also experts at knowing how to complete the tax forms to the best interest of your company. Accountants keep up to date on all the regulations and nuances of the law. Penalties can add up quickly.
Advice – The accountant is a valuable resource for information and counsel when you are trying to make business decisions. They are able to discuss profitability and can guide you in the best direction for your company. They are able to help revise your business plan and suggest strategies to increase your returns on investments.
Reliable – As a third party, they have an objective viewpoint on your operations and are happy to help find ways to increase your profits. They are also able to guide you toward reasonable targets.
Connections – If you are looking for investors or are considering applying for a loan, the accountant may have ideas of individuals or companies who are most likely to consider investing in your type of business. They will also help you gather all the financial records and prepare the reports necessary for you to complete the business plan. They may even let you do a dry run of your presentation and help with suggestions.
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- The Capex Team