An accountant is a professional who handles the company’s financial affairs. This includes government paperwork like tax filings, tracking invoices and accounts receivable, and consulting on accounting strategy. While every small business can benefit from working with an accountant, it’s not always essential. But 89 percent of business owners notice a boost from their collaboration with financial experts.
Taxes are one of the most important issues a small business faces. A qualified accountant can keep you abreast of your filing and payment obligations. They can also help you minimize your tax liability through deductions and other strategies. Depending on the legal structure of your business, you may have to file taxes at the federal, state, and local levels. You might be required to pay income and employment taxes, sales tax, property tax, excise tax, and more.
You can avoid costly mistakes by keeping good records of your company’s revenues and expenses. You should also open a separate business checking account to make it easier to identify all your business transactions. You can choose a calendar or fiscal year to use as your accounting period, but you must check with the IRS for specific rules about this issue. The IRS provides extensive taxation information for businesses. You can contact your state, county, or city tax authorities for additional information.
Payroll is the amount of money a business pays to employees. It includes employee wages, deductions like Social Security and Medicare, and federal and state income taxes. Payroll is an important expense, and it’s crucial to get it right. A miscalculation can result in fines and penalties for the business owner.
Small businesses often handle payroll themselves, but it’s also common to hire a bookkeeper or accountant to manage the process. In large companies, human resources or accounting departments typically handle payroll. Small companies may also outsource their payroll to a third-party professional employer organization (PEO), an employer of record (EOR) or a specialist payroll provider.
The most important factor in running payroll is being on time. It’s critical that you pay employees their net pay on the correct date, and that you file all required tax forms in a timely manner. This helps prevent late fees and penalties from being assessed by the IRS and state agencies.
Financial reporting is the process of generating accounting reports at the end of each fiscal period. These statements track and analyze business income, which stakeholders can then use to understand the health of a company. This data can be used to make informed decisions about resource allocation, business expansion opportunities, and more. Read more bizop.org Additionally, accurate financial reporting can help small businesses attract investors and lenders by demonstrating their financial stability and growth potential. Additionally, it allows businesses to meet tax regulations and other industry-specific requirements.
Investing in a financial reporting system will ensure that your small business adheres to the most current rules and regulations, and is operating at peak efficiency. Using accounting software can also automate these processes, reduce the possibility of errors, and provide real-time insights into your business. Deskera is a cloud-based solution that records all of your transactions and generates accurate statements in just seconds. Sign up today for a free trial of our USA-based software, and start managing your financials like a pro!
Whether you’re exploring a new business idea, setting up steps to launch your startup, seeking investors or applying for a loan, a strong strategic plan is critical. Depending on the stage of your business, you may need a full and detailed plan or a concise one that concentrates on financials and strategy. A good accountant can help with both. A thorough business plan will typically include a description of your management team and their responsibilities; a detailed product or service offering; a marketing plan; competitive research; and financial projections including balance sheets, profit-and-loss statements and cash flow statements going back three years.
It’s also a good idea to include any other pertinent documents and information that support your business. This could include local permits, licenses and deeds; professional certificates and licensing; media clips; key customer contracts and purchase orders; and other relevant background information.