Small business owners often view accounting services as only delivering the necessary output for tax reporting. And, yes, financial professionals do fully understand balanced bookkeeping with accurate categorization of transactions, plus the forms for various taxes. However, your accountant isn’t just about your taxes; accountants are also capable of providing analyses that can strengthen small businesses and help them grow.
Consequently, tax season should not be the only reason for meeting with your accountant. Savvy small business owners arrange to meet frequently with the professionals who most understand their financial situation, as they have the tools to help owners build their companies.
Accounting professionals can use your financial data to give you insight into business trends and help you weigh risks against potential rewards. This kind of financial management service can provide solutions to support sustainability and growth of your small business.
Those savvy individuals who avail themselves of these services recognize that different phases of their business demand different skill sets. Taking a concept from development to a full operation is not the same as overseeing an evolving organization. To thrive in business, you need to understand the financial measures that promote success. And your accountant can help you.
Executives at large enterprises have at their disposal an extensive network of internal financial professionals to help them navigate their operations. As a small business owner, you have access to the same expertise through your accountant. Relying on him or her for financial mentoring will increase your knowledge and improve your decisions.
Understanding industry standards
Your accountant can explain the business facts represented by your numbers. Ask first for a comprehensive general overview of key financial elements for your industry. Find out how your business compares in the basic measures of financial soundness. Inquire about trends in your financial measurements. Keep asking until you understand the actions that deliver good results versus those that contribute to declining performance.
Your accountant doesn’t live in the past; he or she can see where your business is headed and what’s required to reach specific targets. Consider your accountant a consultant who can identify likely future scenarios, explain new initiatives you could implement to attain improved results, and quantify the costs. He or she will ask you to consider factors you may be overlooking. From these, you can project cash flow to help in plotting an achievable course of action.
Planning for financial security
Your accountant can also help you plan for long-term financial security. Some of the cash your business generates exceeds what’s needed to sustain operations and provide for your own compensation. Saving techniques suggested by your accountant may ultimately enable you to fund a business expansion, save for retirement, or transition to a different business model. Best of all, they may also deliver tax benefits now.
Your trusted accountant provides solid guidance that’s crucial for the inevitable but uncertain changes every business owner faces. Make good use of him or her.