As a small business owner, you’re likely wondering when to engage a professional accountant. Hiring an accountant for a small business can seem like something to put off, as you may not feel in a comfortable position to start hiring consultants. However, accountants should be one of the earliest professionals you work with as they can help with business planning, financial registrations, forecasting, and more. Read our blog to learn more about when to hire an accountant for a small business.
Challenges Small Businesses Face
Small businesses can face many challenges. As a locally owned business, you will often find yourself needing to work hard to overcome difficulties larger companies may not face as often. Here are some of the key challenges small business owners face:
- Lack of Funds
- Lack of Time
- Hiring Staff
- Succession Planning
- Growth
Lack of Funds
Small businesses may need assistance with loans, as they will often be required to provide cash projection statements to get funding. A CPA can provide the projections needed and business plan needed to assist with getting funding. We can also assist by introducing banking contacts
Lack of Time
Small businesses often find themselves bogged down with the wide variety of responsibilities involved in starting a business, whether it’s customer service, planning, inventory, payroll, and more. Small business owners may not have the time to understand numbers, receivables, or payable cycles. This is where an accountant can help free up some of their time so they can focus on the business while we focus on their bookkeeping and financial planning side.
Hiring Staff
Some businesses struggle with hiring the right staff. As professional accountants, we can assist with conducting interviews for certain accounting-based positions that can set up the company’s success early on. Our team can also assist with financial planning of future payrolls, to ensure that when you hire new staff, it is sustainable.
Succession Planning
Businesses may have a hard time determining if selling their business is the right choice, as well as how to go about selling their business. This includes knowing the sale price, finding the right lawyers and valuation team, as well as how to transition the business over to family members. Your accountant can help shape the future of the business by assisting with valuation services for selling as well as estate freeze options for family members to carry on the legacy of the business.
Growth
Growing sustainable can be a difficult challenge for many small businesses. Accountants can provide business owners with regular, people-focused financial metrics so that the business can make quick decisions and pivot as needed. This will ensure that businesses have the strategy and the date to grow in the right direction and at the right pace.
Do You Need an Accountant for a Business Plan?
A business plan defines a company’s objectives and how it plans to achieve its goals in great detail. It lays out a written roadmap for a company’s marketing, financial, and operational standpoints. It can highlight key staff who are responsible for achieving the goals, timelines, and purpose of the business.
The purpose of a business plan is to summarize the organization’s strategy in order to execute it long term, help secure financing from investors, and help to forecast future business demands.
An accountant should be involved in the design of your business plan as they can provide an in-depth understanding of a business’ financial situation. CPAs have a lot of experience with a wide variety of businesses and industries, so it is highly likely that they will be able to apply knowledge gained from other businesses to assist with forecasting and creating your business plan.
CPAs can provide realistic information, forecast costs and cash flow, as well as walk business owners through all financials. Along with assisting in planning, accountants can register your business with a CRA GST/HST number and business number, provide a payroll number if needed, and assist with other set up needs. Accountants have financial insight and foundational knowledge that can help to build a realistic viable plan.
How an Accountant Can Help a Small Business
There are many ways an accountant can help a small business, which is why it’s important to hire an accountant as soon as you begin bringing a business into fruition. Here are some of the key ways an accountant can help your small business.
- Building a business plan
- Business Registrations
- Bookkeeping
- Tax Planning and Compliance
- Software Setup and Training
- Purchasing a Business
- Audits
- Advising
Building a Business Plan
As mentioned above, accountants are important to involve when writing and building a business plan. This is because they can use their experience and accounting software to add financial projections and reporting, helping to create a business plan that is achievable. Hiring an accountant from the start can save you time and money in the long run.
Business Registrations
Accountants will help you register your business for all the necessary financial programs. We have a wide range of experience and know the different registrations that will help your business run smoothly and save you money. This includes registering for GST/HST, Payroll, insurance, and WCB, and more.
Bookkeeping
Most clients have bookkeeping services they provide, or have relationships with great bookkeepers who can train small businesses in the best way of bookkeeping. Keeping clean records is crucial for accounting. Accountants can ensure that your bookkeeping is organized and ready for tax time.
Tax Planning and Compliance
An accountant will assist with providing deadline updates, when things are due, penalties for being late, and will push the business owner to file on time so that they are always compliant with CRA filing requirements, and possibly bank financing requirements.
Software Setup and Training
Accountants see the day to day operations of a business, and know where there is room for improvement in terms of software for business operations, monthly reporting for decision making, where the business owner can best spend their time, SWAT analysis, best strategy for payroll vs dividends, and putting them in touch with the right financing team where needed.
Purchasing a Business
If you’re looking to purchase a business rather than start one from the ground up, it’s important to involve an accountant from the beginning. The accountant will help you acquire financing, valuation of the business, and more.
Audits
Having an accountant on your side while being audited can help you save a lot of time and stress. An accountant will understand what is being requested for the audit, communicate on your behalf with the auditor, and catch any potential mistakes the auditor may make. Gallo LLP offers Audit Insurance to protect you in the case of being audited.
Advising
Professional accountants are able to provide financial advice and consulting services. They can advise you on cash flow projections, growth acquisitions, leasing and buying decisions, corporate reorganization and restructuring, and more.
How Early Should a Small Business Hire an Accountant?
When it comes to helping a small business succeed, the earlier you hire a professional accountant the better. At Gallo LLP, our team of CPAs will assist your business in getting started and registered for all the important tax and financial programs, provide you with advice on moving forward with your business, assist with auditing, and more! If you would like help winning in business, contact us today!