Of course, there comes a time when your accounting resources run thin. Perhaps you’re experiencing rapid business growth, or are overwhelmed at tax time. You may be wondering, when is the right time to find additional accounting support? Are outside accountants worth the investment? If one of the following seven scenarios sound familiar to you, it may be time for you to look for some help.
Scenario 1: You Owe a Lot in Taxes
You keep close track of employee payroll and benefits. You estimate this year’s tax burden based on previous years and try to plan properly. You spend days completing your taxes. Yet each year you still find yourself owing money to the IRS. This may be an indicator that there’s some uncertainty with regards to the United States tax code. And who can blame you? Our nation’s tax code is one of the most complicated in the world, which is why we have accountants and tax professionals. These experts not only help you properly estimate your taxes each year, but know the deductions available for you to minimize your tax burden. Accountants can even file your tax forms so you can spend that time focusing on running your business.
Scenario 2: You’re Facing an Audit
The word that everyone fears after filing their tax return. While audits don’t automatically mean you did something wrong, the IRS did spot something that warranted a closer look. Perhaps your deductions are out of sync with your income. Maybe all the numbers on your returns were rounded. These are all common practices that can trigger an audit. Fortunately, experienced accountants can provide guidance through an audit and point out what you can do to prevent one in the future!
Scenario 3: You’re Experiencing Rapid Business Growth
Perhaps your baking business is gaining traction around town and you need to purchase new equipment to keep up with demand. Maybe you’re having trouble keeping up with the orders coming through your online clothing store and need to hire employees. Many small businesses have one or two bookkeepers, but they can quickly get overwhelmed with the additional paperwork that comes with growth. This opens up room for error and makes reconciling at tax time a nightmare. Accountants can walk you through these new forms and processes and ensure everything is in compliance with tax laws.
Scenario 4: Your Business Has Stalled Profit Growth
Perhaps your business’s revenue is increasing yet your profit margin is shrinking. In other words, sales aren’t turning into increased profits in your pocket. This likely means costs are getting out of hand and need to be reeled in. Business owners are often too close to everyday operations and likely had a hand in creating them. This makes it hard for them to take a step back to find processes or practices that are costing the businesses too much.
Accountants do more than invoice and file taxes. They can look at your overhead and suggest ways to rein in costs. Perhaps your packing and shipping process can be streamlined. Maybe you can switch to cheaper supplies that aren’t crucial to the quality of your product. Sometimes an objective perspective is all you need to get your profits growing again.
Scenario 5: Your Business Grows Across State Lines
There comes a point when business growth goes beyond hiring new employees and working out of a small office space or warehouse. If you run a restaurant, maybe you have the opportunity to open up another location, maybe in another state! Maybe you found a warehouse in another state to keep up with your product’s demand. Both cases require a significant change in business operations.
Every state and locality has its own regulations, complete with tax laws and paperwork. While you and your in-house team may understand the rules of your current location, how much time are you willing to set aside to learn about a new state? Accountants can help you set up your payroll and tax reporting processes to ensure you’re in compliance with local and state laws. Come tax time, accountants can also ease the burden of filing multiple state returns.
Scenario 6: You Know You’re Out of Your Depth
We’ve walked through several scenarios that may sound familiar to you. Yet the most important sign that your business needs help is when you or your team feel exhausted and overwhelmed. Everyone is stressed around tax time, but is your in-house accountant overwhelmed simply by completing payroll? Do you find yourself pouring through online accounting resources trying to teach yourself? Is this taking time away from running your business?
Reaching out for additional accounting support doesn’t mean replacing your existing team. Perhaps your in-house accountant has invoicing and payroll under control but needs to turn taxes to someone else. Maybe your bookkeepers only need to be walked through out-of-state employment forms once. In either case, a specialized accountant can save your team from hours of stress that could be taking a toll on operations.
Choosing the Right Accountant for You
Regardless of why you need to hire accounting support, it’s important to choose an accountant or team that’s right for you. If you prefer in-person support, ask for referrals from local business owners. Be sure to conduct your own research through online reviews. Ensure that the accountant specializes in the support your need, such as auditing. Let’s not forget that in today’s world, remote finance teams are also at your fingertips. These teams typically include accountants and other financial advisors to provide the right advice for your business. Regardless of the accounting support you choose, you should be able to get a free consultation.
Hiring outside help is nothing to be ashamed about. In fact, this is a good indicator that your business is growing faster than expected or you’re dedicated to running compliant and ethical operations. Accountants have the expertise necessary to ensure businesses meet all accounting and tax regulations. They can educate your bookkeeper(s) and in-house accountant(s) about topics they aren’t familiar with. Running a successful business means tapping every resource to keep operations strong. This means keeping the numbers in check, as any good accountant will tell you.
Source: http://tweakyourbiz.com/
Image Credit: Shutterstock
Theresa Todman, Managing Partner/CEO of B&M Financial Management Services, LLC . Theresa specializes in bookkeeping, accounting, QuickBooks solutions, small business tax issues and consulting.
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