4 Ways You Save Money When Working With an Accountant
Kayla Schulte, Audit Manager
November 19, 2019
Profitability is one of your primary business objectives. It not only gives your company a lifeline but also helps it to multiply. You might be doing all you can to cut down on your expenses, including maintaining a small labor force to include only the exact number of employees that your business needs. However, one key area that you may have overlooked is the accounting.
A professional accountant is a must for your business to succeed. Modern-day accountants do more than just filing taxes and preparing business reports. They help you stop the leaks in your business so you can save more money in the long run. They do so in the following ways:
The average tax rate for most small businesses is 19.8%. However, your tax position depends on the structure of your business. For example, your business can be structured as either a sole proprietorship, partnership, or corporation, and your tax liabilities differ significantly between each. You must pay taxes appropriately or get fined heftily.
Also, understanding the tax laws can be difficult for non-accountants. Without the appropriate knowledge, you could end up paying excessive amounts in taxes. Accountants understand how such tax laws work and help you to follow them.
For example, the US Congress recently introduced the Qualified Business Income Deduction. This deduction allows small businesses to get a tax reprieve on up to 20% of their income. An accountant can help you to properly structure your business to take advantage of all potential tax breaks such as this one.
Your tax liabilities also shift as your business evolves from one stage to the other. The taxation laws change from time to time, depending on the amendments effected by the government. As such, your tax position might change significantly over time. An accountant monitors the changes and advises you accordingly.
Hiring a new employee costs a great deal of money and requires a lot of time with training. For this reason, you might fear to hire an accountant because of the potential requirements needed to onboard them. To you, it may appear less costly to handle all the accounting work personally. This seems like a great strategy, but it could come at a cost; more work and stress, less accuracy, underutilized tax breaks, etc.
The best alternative is to outsource a professional accountant. They have the combined skill-set of an entire accounting team, which one full-time employee may lack. They are paid on a project basis, and you only need them for a few hours each week. They enable you to cut down your expenses but still benefit from their top-notch accounting skills.
Your small business may not require a full-time accountant. However, this does not mean that the accounting work should be put on hold. Outsourcing an accountant ensures that the work is done well, but at a lower cost.
Most accountants work with numerous businesses in different sectors, which makes their business knowledge go unmatched. Such expertise bolsters your business performance when it is applied. Accountants can assist you in identifying your most profitable clients and help you manage them sensibly. They have proven tips on how you can cut down business costs and set realistic targets.
Overall, accountants work as a coach to help you boost your success. They can help you to plan for growth by advising on better internal controls or processes. Also, they can offer advice on business practices and investments that can curtail your company’s profitability.
Free Up Your Time
As a business owner, you never started your business to do the tasks you know nothing about. However, that is what you might find yourself doing as you wear out your calculator every two weeks. If you are not doing the accounting work, then you probably have one of your employees handling it. If they do not have the right expertise, then it means their time is better spent elsewhere.
It wastes precious business time to have you or your employees handle duties they are unqualified for. Not only does it lead to inefficiency, but it also limits the time spent on other essential business functions. Eventually, this causes business lags and losses that lower your profitability.
Is your time not better spent handling the core aspects of your business? This mainly implies bettering your product or services and understanding the market. It allows you to serve your customers well and even attract more revenue as you stabilize your business. This sets up a platform for your business to grow rapidly and prosperously.
Please get in touch with us if you are ready to cut down your company’s business costs. We have a team of highly-experienced accountants who have worked at some of the nation’s largest firms. We can help you bridge your accounting functions with your business goals to experience more profitability.
Kayla Schulte is an Audit Manager at Lutz. She began her career in 2015. She is responsible for performing audits, reviews, and compilations for clients and employee benefit plans with a focus on the retail, nonprofit, and governmental industries. In addition, Schulte assists with business income tax return preparation and bookkeeping.
We work to simplify complexities, help make critical business decisions, and confidently focus on the things that are truly important to you. We embrace your business as our own to spark the right solutions and help you thrive.