The word “accountant” conjures up an image of a person handling the finances of any given company. An accountant deals with the process of recording, measuring, and communicating financial information and transactions. The goal of the accountant is to regulate and ensure the financial health of a company.
But did you know that an accountant also plays a critical role in the growth of your company?
Yes, he or she can help your business, especially if you’re a small company that’s looking to grow. Chances are your company has just started and is making all the right moves to grow and thrive in today’s extremely competitive market.
You may be wondering how an accountant can be instrumental to the overall success of your business, and when you should hire one for your company. Here are three instances when having an accountant will come in handy:
1. Drafting a Business Plan
You’ll need the assistance and financial expertise of an accountant when you’re in the process of drafting your business plan. You know that the heart of a business is its finances. The main purpose of doing business is to earn a profit, more than anything else. While there are so many things to consider when putting a business plan together, the finances should be a top priority.
For this reason, a small business accountant will play a crucial role in your business if you decide to hire one. He or she will help you create a professional, realistic business plan anchored on the company’s initial finances, financial direction, and financial goals. He or she will be able to use accounting software for essential reporting and financial projections.
2. Establishing Legal Structure
The next thing to consider is the accountant’s advice about your company’s legal structure. As you may know, there are different types of businesses, and they don’t all have the same legal structure. Some companies may be a corporation, liability partnership, limited liability company, or sole proprietorship. As your company has just started to do business and is slowly growing, you need to consider what direction you’d like to go in when it comes to your legal structure.
For instance, you may choose to be a sole proprietorship. If so, you may be able to offset some of your living expenses against tax. On the other hand, if you opt for a limited liability company structure, the liability is limited to the assets owned by the business itself, not the ones you own personally. That said, your accountant can help you decide which of the available legal structures best suits you.
3. Ensuring Financial Health
Finally, you need an accountant to help you with your finances in the first place. This will be the primary role of the one you hired. As mentioned, your accountant will communicate all financial information within the company. He or she will track all the financial transactions and monitor the financial flow of the business. He or she will ensure the business can regulate and maintain its financial health. But here’s the thing: as your business grows, the accounting aspect of it can become complex.
In such an instance, you won’t be able to handle it on your own. Eventually, you’ll lose control of who owes you money and how much you need to spend. This is where the accountant comes in to help you get back on track with your finances. Your accountant will be able to handle payroll, monitor the pulse of your business, regulate the cash flow, and help you make sound business decisions based on your company’s financial status.