By Analytix Editorial Team
A business, whether a startup or an established one, needs reliable bookkeeping and accounting support to sustain financial stability which eventually translates into growth. More businesses falter and sometimes cease to exist because of a lack of adequate financial support. This can be prevented with judicious financial planning. Following are several reasons why a small business needs a dedicated bookkeeper and accountant:
Cash flow is ultimately the instrument that decides business investments and the extent of expenses. Liquidity, or amount of cash free for immediate expenses, is a reflection of a well-managed cash flow process. A professional bookkeeper and accountant are best equipped to ensure entries are recorded in a timely manner, so that a business stays on top of its cash flow process.
An accountant is the best person to advise a business on its tax obligations, identifying tax credits and deductions that help to optimize savings.
This is vital because tax obligations differ, depending on the type of business and the tax deductions allowed. Even if a business owner is a trained accounting professional, it may not be possible for them to keep up with the rapidly growing needs of the business. A professional accountant is also better positioned to retrieve the financial data required during tax season. Accountants are familiar with what is required to prove expenses were related to business operations which can assist in helping to claim various deductions. Keep in mind that the IRS asks to see proof when businesses claim tax credits or deductions applicable to them.
While the business owner may have a background in accounting and may understand financial operations, that is not the focus of their business. Both business development and accounting are time intensive functions, so it is easy to lose sight of one when pursuing the other. Hiring a professional not involved in business development or in managing the daily business operations can help ensure two things: 1) the accounting will stay on track while keeping the pace and momentum of growth, and 2) the business development will stay on track as the business owner is not distracted by the critical accounting tasks.
The accounting and bookkeeping industry has seen significant innovation in optimizing these functions. Accounting professionals who are focused on the industry are aware of technological and software developments that can be leveraged to improve efficiency. Optimizing technology leads to more reliable and timely accounting reports, reduced manual error through automatic data entry and transaction recordings, and automated reminders for time sensitive deadlines. . Furthermore, these advantages also translate into freeing up employee’s time to focus on more critical functions.
Bring in the Professionals
Because of the challenges posed to business owners of having to balance managing both detailed accounting and bookkeeping with everyday operations, businesses should consider hiring professionals in the form of outsourcing services providers. This not only addresses the financial operational aspects, but also dispenses with the need to invest in accounting software, infrastructure, trained manpower, etc. thus saving the business both time and money.
At Analytix Solutions, we offer full-range, scalable bookkeeping and accounting solutions for startups and small to mid-sized companies. Our services help streamline operations so that financial records are accurate and reliable, while leaving key resources free to pursue vital business development activities. For more information on how we can assist your business with its accounting and bookkeeping, call us at 781-503-9002 or email us at [email protected].