Accountants are so useful for businesses small and large, we had to split the content into two parts! During Part I, we discussed how an accountant can help a start-up during the preliminary phase; it’s mainly by making sure all your ducks are in a row, so to speak, before you start pitching your business and making sales. In essence, an accountant helps at the start by making sure all necessary practices and infrastructure are in place so that by year’s end, you’re ready to file your taxes.
When your business is up and running, it’s still essential to have an accountant. There’s a wide variety of financial statements you’ll want to create, and these statements serve a variety of purposes. When tax time comes around, well-curated financial statements make it easier to file. Additionally, when you’re looking to get investment to grow your business, an accountant can interpret your financial statements in order to make your pitch for investment more exciting to potential investors. Accountants can also review your payroll processes, and sort out independent contractors from employees, in order to make sure everyone is being paid properly, their pay is properly recorded, and that the CRA knows who is independent versus who is employed. At the end of the year, your accountant will help you close the books, making sure all of your ledgers are properly balanced, creating end-of-year financial statements and forecasts to show your investors, and completing your taxes so it’s easy to file with the CRA. They can even show you ways of making charitable donations so you can help the world and get a tax break for your business.
Accountants can help your business grow. An experienced accounting firm will track patterns; they are experts in the analysis of financial data. By analyzing pricing, inventory management, financing and cash flow, your accountant will be able to target areas where your money could be working better; they might notice that a slight price increase wouldn’t decrease the number of sales in a substantial way, or that lowering your inventory on hand won’t decrease your ability to sell with agility. They can help you avoid audits, and if you are audited, they’ll help you through the entire process; with the good practices you’ve had your accountant put into place, the audit should be as much of a breeze as audits can possibly be. They’ll help you create a budget for each quarter and each year, and if it comes time to sell your business, they can help you create a fair valuation.
This ttwo-partseries is all to say something quite simple: if you’re working with large sums of money, it’s a good idea to have someone who’s an expert at analyzing money on your team. They can help you better understand the core of your business: your profits and your expenses. They can give you so many incremental advantages that a good accountant more than pays for themselves; they are a worthwhile, intelligent investment in the future of your business.