preparing for tax time all year long

Naturally, you want to save money on anything you can when running a small business, but accounting should not be something you scrimp on. Calling on accountants can be the best move you can make to avoid the common pitfalls many small business owners face.

Time vs. Cost

As the business owner, your time is valuable. It should be spent on customer relationships and growing your business, not on keeping the books. Do what you do best and hire an accounting firm to take the burden of handling complicated money matters off your shoulders. You will find that you actually save money overall, because you have more time to increase your bottom line.

Confusing Profit and Cash Flow

Profit is easy. It's the amount you earn from sales over and above your costs. Cash flow is a little more complicated. Some small business owners are too lenient with collecting their accounts receivable and end up with a lot of sales profit but not enough money to pay the bills. An accountant can handle your accounts receivable and collections in a non-personal manner that will  ensure a positive cash flow to sustain your business.

Not Keeping Up With Technology

Using up-to-date accounting software can make a huge difference in the efficiency of your business. Unfortunately, quality software and its constant updates can be expensive. That is why many quality accounting firms are moving more toward using subscription cloud-based accounting software to give their clients the most accurate, up-to-date results available. Hiring an accountant saves you not only the cost of buying the best software and keeping it updated, but also the aggravation, time and inevitable human errors involved in trying to learn to use it properly.

Mixing Personal with Business Money

This is a mistake that can cause not only financial problems, but tax problems as well. Especially at the startup of a business, you tend to pay a lot of expenses out of your own pocket. Not accounting properly for those expenditures can land you in trouble come tax time due to having no records to claim deductions. If an accountant is handling your money, he will be able to keep better track of purchases and expenditures by keeping your personal and business accounting separate. He will also be able to keep you from dipping into the business accounts for personal expenses.

How, where, when and how money moves in and out of your small business is a complicated matter best handled by professionals. You can avoid many of the common downfalls of trying to do it all yourself by hiring the best accountant you can afford. A highly respected accounting firm will be happy to consult with you on how using them can improve your bottom line.