Most of us have heard a story or two about “hot shot” accountants that save their clients untold mountains of cash by reorganizing sole proprietors into churches, or moving trust funds into double-secret offshore accounts. While these are usually tall tales that stretch the truth as much as the tax code, what lots of small business owners might not realize is that a good accountant really can save them big money – and without bending the law.
In fact, there are a lot of ways that an accounting professional can help you see an improvement in the bottom line. Here are four of the biggest:
Smoothing out your cash flow
If there’s one challenge that’s universal to nearly every small business on the planet, it’s keeping the receivables coming in at a steady enough rate. Payroll, utilities, vendor invoices and estimated tax payments all have to be paid regularly, even though your deposits might not.
A strong accountant can help you keep tabs on what you have coming in and out on a weekly basis, as well as help you anticipate upcoming expenses. This should be reason enough for any business owner to retain one.
Helping with the fine print
Lots of businesses are set up incorrectly; they’re established as sole proprietors when limited liability corporations would make more sense, for example, or arranged as S corporations when there’s no reason to justify the extra paperwork.
If you suspect your business isn’t set up as profitably as it could be, a good accountant can help you find out. Not only will they know the ins and outs of the current laws, but they can even help you transition into a format that better suits your short and long term goals.
Saving you money on taxes
While this is the most well-known benefit to using an accountant – April 15 is to many CPAs what Valentine’s Day is to florists – it would be hard to overstate its importance. Millions of business owners in this country routinely miss out on tax credits and deductions they could claim, simply because they don’t know to look for them.
Having someone who knows the tax code, and your business, can easily make a five or six-figure difference in your profit and loss sheet; that’s something few businesses can afford to overlook.
Making strong connections
Accountants don’t just know about taxes and payroll. They also know the names and numbers of top lawyers and financial planners. If your accounting professional has been in business for more than a few years, it’s likely he or she can connect you to other professionals in the area, not to mention coordinating with them to make sure your business and money are being well cared for.
It might be fun to hear about crooked accountants bending the law to hide millions, but the truth is that a hardworking professional can save you quite a bit – in time, stress, and the bottom line.