One of the essential operations in your small business is accounting. Accounting is the tracking of income, expenses, and overall management of the finances for the company. Some of the areas that accounting takes care of include:
- Tracking sales and income
- Accounts payable and receivable
- Processing invoices
- Tracking expenses
- Payroll, including taxes
- Federal and state taxes
- Tracking assets and depreciation for tax purposes
- Preparing financial records for investors, banks, or loan applications
- Providing detailed information about the overall financial picture of the business
Accounting is not just bookkeeping, but bookkeeping is necessary for accounting. Bookkeeping is the act of keeping financial information current and accurate so that the accountant can use that data to process the financial information for the business.
DIY Accounting Or Accounting Service?
For many small businesses, the owner of the company is already performing the jobs of ten people. In an effort to get their business up and running, these owners take on many responsibilities at once. However, accounting often gets put to the side until late at night when they have some quiet time.
Sadly, many of these business owners have not had previous experience with accounting and are relying heavily on software that is designed for bookkeeping and not necessarily accounting. This can translate into a very large financial mess.
Accounting does more than track your sales and expenses for the day. An accountant works in all areas of the finances for your company. They prepare taxes, find tax credits, manage payroll, prepare documents and create documents for the owner so that they get a full view of the financial health of their company.
If a business owner is already performing multiple duties at their business, it may be in their best interest to use an accounting service. This relieves them of some of their daily work, but it also ensures that the company’s financial information is always accurate. Accurate accounting not only benefits you for taxes and loan applications but can also help you detect mistakes and fraud.
When your financial information is accurate, you can make better choices for your business. You can make better stock decisions, marketing choices and manage employee wages easier by looking at the data. You can also see your strengths and weaknesses, allowing you to make informed choices about your company.
The best thing about choosing an accountant over DIY is that accountants have the education and experience to back up their work. They specialize in this type of service and can provide you with the most benefits.
Business owners have many responsibilities and tasks to complete each day. It can be hard to delegate these tasks to others, especially when your company is new or small. Opting for an accountant instead of adding this task to your list of things to do will give you peace of mind knowing that your financial information is always current and accurate and that you have one less thing to do each day.