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4+ Reasons Why Your Business Needs An Accountant

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StrategyDriven Managing Your Finances Article |Why Your Business Needs an Accountant|4+ Reasons Why Your Business Needs An AccountantWhether you’re starting up a new business or have a successful one already, you may feel like you don’t need to use an accountant. After all, if your financials are simple enough to calculate, why pay for the services of an accountancy firm?

Well, whether you may wish to admit it or not, there are actually several reasons why it makes perfect sense to use an accountant for your enterprise. Here are seven of the top reasons to enlist the services of a local and reputable accountancy firm:

1. You can ensure your tax affairs are all in order

Let’s face it: one of the reasons anyone hires an accountant is because they want to lower their tax liability. The thing is, if you attempt to manage your firm’s financials yourself, you could be in danger of paying too little tax. It’s for that reason alone that an accountant can make sure your tax affairs are all in order, especially with things like IR35 and capital gains tax.

2. You find dealing with finances rather boring

Trawling through tens or even hundreds of documents to determine things like turnover, profit and loss, and tax liability isn’t the most fun job in the world. If you haven’t got a head for numbers or just find the idea of dealing with company accounts boring, you are most likely to make mistakes in your calculations. That’s why it’s best to leave such tasks to professionals.

3. You can get advice on improving your business

It goes without saying that accountants have an intimate insight into the financial health of each client’s organizations. With that in mind, when an accountant works on your firm’s financials, they are best placed to advise you where you could improve things in your business to increase profitability. For example, they can suggest ways to save money by cutting out certain expenses.

StrategyDriven Managing Your Finances Article |Why Your Business Needs an Accountant|4+ Reasons Why Your Business Needs An Accountant4. You want to raise extra capital for your business

If you’re planning an ambitious growth project for your business, you may find that you need to secure funding from a third party such as an angel investor or your bank. Before you can ask anyone to lend you some money, you need to provide a detailed insight into your company’s financial health. You will also most likely need to provide financial forecasts to show that your business is a viable one. An accountant is the best person to ask for help with such requirements.

5. You need to have an audit

There are times where businesses must legally oblige with audit requests from government agencies such as a tax office. Some business owners panic when they must comply with audit requests, especially when they’ve been taking care of their financial paperwork themselves. Luckily, an accountant can make it easy for you to provide the required documentation for any audits.

6. You want to sell your business

If you’re planning to retire soon, you are likely going to sell your business and use some of the proceeds to have a comfortable retirement. An accountant can help you determine the value of your business.

How to Choose the Best Accounting Software for Your Small Business

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StrategyDriven Managing Your Finances Article |accounting software|How to Choose the Best Accounting Software for Your Small BusinessWhile only 1 in 100 small businesses get audited each year it is still a good idea to have top-notch accounting software to document your business activities.

If you are a small business, chances are you don’t have a degree in computer science or accounting, so how do you choose the right software for you? Read on to learn how to choose the right accounting software for your small business.

How to Choose The Best Small Business Accounting Software

If you are an entrepreneur, chances are you are looking to keep overhead costs low and profits high. You also have limited time and resources, so hiring a big accounting firm is out of reach. This is where accounting software can help.

Small business accounting software can help you keep track of your income and expenses and depending on the program integrate with your other company activities.

For example, Quickbooks point of sale integrates POS and accounting into one place making it easier for you to manage your retail company.

Step 1: Take the Time to Identify Your Accounting Needs

What kind of company do you run? Is it a brick and motor retail space with a point of sale and inventory needs? Are you a 100% virtual reseller that takes donations?

Regardless of your company set up, you do have unique accounting needs. Identify them so you can choose a software that meets them. Many of the software programs on the market have the ability to integrate with other programs, such as customer relationship platforms.

If you are already using some of these other programs make sure the accounting software you use integrates with them. You do not want to have to enter data into two locations, it takes valuable time and can create errors.

Step 2: Project Your Needs into the Future

You probably have a 2, 5 and even 10-year plan for your company, even if it is not written down on paper. As you are looking at accounting software, jot down your plans for the future. Then determine if the software you are considering will grow with your company.

Ideally, look for a software package that is scalable, meaning that it will grow with you. It is great to have all the bells and whistles up front, but why pay for something you don’t need? Scaleable programs will allow you to add features as you grow and need them.


Step 3: How Much Can You Afford

One of the fastest ways to eliminate choices is by price. Determine how much you can afford, and anything that is not in your price range, eliminate. Again, bells and whistles are nice if you need and can afford them.

Budgets often have some wiggle room but make it a rule that if a solution is more than 25% over your set budget, you’ll walk away.

Now that you understand how to choose the right accounting software, grab your computer and start applying this knowledge to your search.

Does Your Small Business Need Support?

If you are a small business you don’t have the resources to hire all the business professionals you need to move your company forward. This is where we come in, StrategyDriven provides business leaders with the planning and execution advice, tools, and practices needed to achieve superior results.

We take the time to learn your company’s mission and vision. Then, armed with our highly experienced and educated staff, we develop a clear, forward-looking strategy unique to your companies needs.

A plan is only as good as the activities you implement, so we translate that plan into the day-to-day activities you need to make that plan a reality. We can help with choosing accounting software, creating disaster recovery plans, and help with all aspects of program management. Contact us for the out of the box ideas your small business needs.

3 Types of Taxes You Need to Account for as a Small Business Owner

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3 Types of Taxes You Need to Account for as a Small Business OwnerThe longer a business stays open, the greater the chance it will survive. The latest statistics show a third of new businesses fail within two years. Things are more difficult for small businesses. Many small businesses try to stay afloat by cutting corners. The owners may try to handle their own accounting and tax returns. This is difficult for those who don’t have the proper training.

Start Out The Right Way

Failing to pay taxes can kill a business. Indeed, the IRS places a lien on a company’s bank account when they don’t make payroll tax payments. Likewise, a business can be closed for not paying sales tax. That’s why experts recommend hiring a company to handle Business Tax Services. The government scrutinizes the payment of payroll taxes. Owners face harsh fines and penalties for abuses. That’s because payroll taxes are taken out of the employees’ money. Payroll taxes include federal income tax, state and local tax, and medicare and social security taxes.

Payroll Taxes

The employer withholds income taxes on employee wages after deductions are subtracted. Withholdings are based on marital status, tax bracket and the number of dependents. Medicare and social security taxes are known as FICA. 6.2 percent of the employee’s salary is withheld for social security. That amount is matched by the owner. Likewise, each party pays 1.45 percent for medicare. Business owners must file the IRS form 941 quarterly. This form reports withholdings that were taken. The withholdings must be paid to the IRS by a certain time each month. It’s a lot easier having a company do this work. Employers are also legally obligated to pay unemployment taxes. This money has to be available when unemployment claims are made.

Income Taxes

The business owner pays income taxes to the federal and state governments. Indeed, the business’ status can help when it’s tax time. Sole proprietors are the only owner of a business. Hence, they can pay business and personal taxes on one return. A schedule C must accompany the tax return to show the business profits and losses.

Corporations have the most complicated tax system. A corporation must pay income tax twice. The corporation and its owners file separate tax returns. This means owners report after-profit dividends on their tax returns. They’re taxed for the same money as the corporation. LLC owners only have to file one tax return. Sole proprietors pay 100 percent of their FICA taxes. This is known as self-employment tax. This tax makes sure the business owner can get retirement, disability, medicare and survivor benefits.

Sales Tax

Small businesses that sell goods and services must pay sales tax. The owner must apply to collect sales tax before the business opens. Sales tax is kept in a separate bank account and turned over to the Department of Revenue with an accounting. Sales tax must be paid at regular intervals depending on what state one lives in. This is another job for a good accounting service.

Small businesses face a lot of liability if they don’t pay taxes. Sometimes, it’s difficult to keep up with varying tax schedules and do regular work. That’s why it pays off, in the end, to have someone do it for you. This is one area where the company shouldn’t try to save money.