The Business Corner: Why accounting is essential for your business

One aspect of running a business is keeping track of all the revenue and expenses, which will set you up for success each year at tax time and provide valuable insights as you look to grow your business.

It is hard to know where your business is at any given point if you don’t have a handle on the numbers. Here are a few programs, and some tips to keep you compliant and make your life a little easier.

QuickBooks

This is the most popular accounting software for small businesses. It helps business owners keep track of where every penny is going. This is important for annual tax return filing, as well as developing a strategy based on the financial results.

Over the years, QuickBooks has made it easier to get started without professional help, until you can afford internal or external accounting support.

Bookkeeper

Hiring an external bookkeeper can help any business owner make sure that the financial books are in order. Quick tip: Google “Find a QuickBooks ProAdvisor” to search by zip code or city.

If you have been operating for months, or years, or are experiencing rapid growth, bringing in outside support can make sure all transactions are properly entered and available for later review.

Bookkeepers can do things like handle payroll, including onboarding new employees, paying bills, submitting invoices, and entering transactions into QuickBooks.

Some entrepreneurs hire a bookkeeper when they start a new venture so they can focus on selling the products or services their company produces. While others handle bookkeeping themselves because they prefer to not to spend the limited financial resources of their new business.

Certified Public Accountant

A Certified Public Accountant is important each year when filing local, state, and federal taxes for your business. In addition, they can help you identify key information that is coming from your financials.

They can help you plan better for taxes and identify opportunities for growth that are clear from the financials of your business.

Remaining compliant with tax obligations can be challenging for business owners experiencing growth because the amounts due can be large and unexpected.

That is one reason why planning is so critical.

Working with an accountant can also be critical to taking advantage of deductions for new office equipment, retirement planning as an entrepreneur, and determining if you should reorganize your business from a sole proprietorship to an LLC, S-Corp., or C-Corp.

Each type of business has advantages and disadvantages from an accounting perspective.

Checking your numbers twice

Even businesses with internal accounting staff typically hire outside accountants to prepare the tax returns. This serves several purposes, including the reassurance having another set of eyes can be on documents filed with the IRS, as well as local and state tax authorities.

Business with outside investors or large lines of credit have additional needs for independent accounting of their financials to satisfy those stakeholders.

I hope these tips about how important accounting is to your business help you along the path to success. Proper accounting, for many reasons, can be critical for a growing business. At the very least, staying compliant will save you money and a lot of headaches.

Teresa M. Lundy is the Principal and Founder of TML Communications, a strategic public relations, crisis communications and community engagement firm serving corporations, nonprofit organizations and government agencies. Follow Teresa on Twitter @TeresaMLundy.