We are pleased to include our guest author, Chelsea Lamb and a very informative article:
Time to Hire a Professional Accountant for Your Small Business
Only a small percentage of small businesses work with professional accountants. The rest are making a huge mistake! Poor accounting practices are one of the top reasons why small businesses run into cash flow issues and eventually have to close shop. While tackling your own accounting may help you save money upfront, going at it alone can cost you big in the long run. Here are some simple reasons to consider hiring a professional accountant for your small business.
Tax Laws Are Always Changing
One of the main reasons why small business owners hire accountants is to help with tax preparation. Navigating the complexities of small business taxation can be a major headache if you don’t know what you’re doing. On top of this, tax laws
are constantly changing, and you likely don’t have the time or mental bandwidth to stay on top of the yearly adjustments made by the IRS.
For example, the IRS reintroduced form 1099-NEC last year to replace the use of form 1099-MISC for reporting payments to non-employees. This is important if you paid freelancers for work during the 2020 tax season. Knowing which forms to send out to your contract workers can be confusing, but a great CPA can clear things up for you.
Small Mistakes Can Have a High Cost
Overlooking important tax laws can be costly. Even common tax mistakes — misreporting income, overlooking carryovers, failing to attach required forms — can cost you a lot of money in missed benefits or put your business at risk of an audit. Working with a professional accountant will help you avoid these problems completely. Licensed accountants go through specialized certification programs and pursue ongoing education throughout their careers, so they have what it takes to steer clear of mistakes. Fortunately, it’s easy to hire qualified accountants through online job boards where you can look over reviews of their work and consider costs (an accountant hourly rate
is typically $12-$32 per hour).
A CPA Will Save You Countless Hours
Beyond help with tax preparation, a CPA can handle various other aspects of small business financial management including managing payroll, tracking expenses, and monitoring cash flow. Doing these tasks yourself will take a lot of time away from other important parts of your business. Hiring a CPA can also save you a lot of time if you get audited! Tax audits
are incredibly stressful and time-consuming, so it’s best to leave this frustrating process to an accountant.
You’ll Receive Invaluable Support and Advice
One of the best things about working with an accountant is the opportunity to solicit support and advice. Michelle Cornish explains that a CPA can guide you through big financial decisions,
help you formulate a business plan for your startup, and navigate your funding options if you need to apply for a business loan. This will take a great deal of stress off your shoulders!
CPAs are financial experts, so they make ideal consultants when it comes to business finances. This is a good reason why it pays to hire a CPA over a tax preparer. Unlike CPAs, tax preparers are unlicensed and only required to hold a high-school diploma at minimum. They often lack the robust financial skills and expertise of a qualified CPA, so they won’t be able to offer the sound financial advice you need to grow your business.
When you run a small business, you have to do a lot of things yourself. Learning to wear many hats and juggle multiple business roles is all part of the fun! But there are some tasks that are best left to the professions, accounting included. Do yourself and your business a favor by hiring a professional accountant right from the start!
Chelsea Lamb's network includes Business Pop Net
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