Many small business owners are hesitant about approaching an accountant to manage their company’s financial affairs. This could be due to a number of reasons, but one of the most common issues is the notion that hiring an accountant will cost your business more money than you can afford. This approach often ends up being somewhat short-sighted, and the truth is if you don’t hire an accountant for your small business it could end up costing you even more money in the long run.
Tax Savings for Small Businesses
If you have been through the process of filing your own taxes as a small business owner you should know that it is no small feat, especially if you need to run a business at the same time. Hiring an accountant for your small business not only frees up a lot of your time but also ensures that you take advantage of all tax benefits and deductions that are available.
A professional accountant can help your business save money by improving your tax efficiency. Your business will be eligible for certain write-offs and deductions and your accountant will take advantage of these to reduce your tax liability to SARS and in turn, increase your profit. An accountant will ensure that you are not paying any unnecessary taxes and choose the best tax structure for the type of business you are running. Certain deductions are industry specific, such as particular tax breaks that are given to the agricultural sector. Hiring an accountant for your small business ensures that you benefit from tax breaks that you might not have been aware of.
An unforeseen expense can have a big impact on your cash flow, especially if you have a tight budget that you need to stick to. If your taxes are filed incorrectly or submitted after the tax deadline you could be liable for an unforeseen expense in the form of penalties. Tax legislation is constantly changing and it is hard to keep up with these changes. This is why many small business owners trust qualified accountants to help them avoid fines from SARS.
Cash Flow Management
Accountants are experts at drafting and interpreting financial documents such as profit and loss statements, balance sheets and cash flow statements. After analysing these documents your accountant will be able to advise you on the best way forward based on this information. To the untrained eye, it could seem like a business has a healthy cash flow, but further analysis by an accountant reveals that this is not the case. This often occurs when small business owners do not set money aside to settle their taxes or to cover unforeseen expenses. This could lead to them taking out a loan to cover these expenses or worse, lead to bankruptcy.
Accountants are well-versed in the interpretation of financial documents, and they always keep all the possible expenses in mind, as well as being mindful of unexpected expenses. Hiring an accountant for your small business helps you avoid financial pitfalls and ensures that you receive competent advice about your cash flow.
At Booysen Accountants, we offer various business packages to help your business grow and flourish. Contact us for more information or browse our website for more information on any of the services we provide.