If you’re good at money management, you might think that there is no reason to hire an accountant for your contracting business. Some business owners don’t, especially in the first few years when they’re working to get established. But there are reasons you may want to hire one, especially if you struggle to keep your focus on your books. Here are five.
You’re Not a Tax Expert
Many people choose to calculate and file their own taxes. When you start a business, it’s tempting to think that it will be easy to manage your business taxes as well. And if you don’t have a lot of business expenses or purchases to make, that might be close to the truth. On the other hand, hiring an accountant to do your taxes is a relatively minor investment. In exchange, you’re more likely to learn about less-known deductions and credits that your business may be eligible to claim. An accountant is also more likely to get everything correct so that your tax forms are accepted without dispute.
You Need Someone to Manage Your Financial Records
Maintaining financial records is a crucial task for your business. Without it, you may be stuck in a panic when someone asks you for an updated form. For example, if you apply for a loan, you may need an updated profit and loss statement for the application. If you have investors, you’ll need to show them updated financial records for your business activities as well. Just like your taxes, these records can be complicated and easy to make mistakes. In this case, it may make sense to hire a regular accountant who can handle these tasks on your behalf. You’ll need to provide the data, but an accountant can process and use it to generate the required reports.
You’re Not Sure if You’re Following Financial Guidelines
There are a lot of financial guidelines that you may have to follow as a contracting business owner. For example, if you want to bid on public sector projects, you need to confirm that your rate structure for employees complies with local guidelines. Do you know what these guidelines are? Which forms do you need to fill out and submit along with your bid? If these questions fill you with dread, then you might need an accountant to help you sort through them and determine which ones apply to your business. This way, you can avoid the stress of being unsure if you’re following the rules, with extra support in handling these administrative tasks.
You Want Help Planning Your Spending
In the early years of your business, cash flow is everything. Before you increase your own income or invest further in your business, you must make sure that you have adequate funds to keep the business running. The problem is that you may not know what you need to make that happen. And if you make errors in your estimates, you may end up without the money you need to pay yourself or your employees. Accountants do more than just file your taxes or fill out other forms. They can also help you look at your income and expenses, and create a plan that you can follow for several months or the next year.
You Don’t Have Much Business Support
There’s a reason that many licensed contractors are self-employed. In the beginning, you might not have anyone else available to work with you. Being able to make all the decisions can be nice in that you don’t have conflict when it’s time to make a choice. But it also means that you don’t get input from others, which can be a problem when you’re making a decision without a lot of information or experience to guide you. In this case, it makes sense to consider hiring an accountant to help you evaluate financial choices and select the one that works best for your business. This way, you have an objective expert who can provide you with an appropriate level of support.
Handling your business finances is less stressful when you can hire a professional accountant to ensure everything is correct. For more information about starting your own contracting business, visit CSLS today!