Most will think of accountants as an extravagance, especially when you are running a startup and trying to run a lean operation. You, however, are not most people. Wage earners can get away with never seeing an accountant all their lives unless they have created income streams outside of their salaries. It is an entirely different story for business owners and the self-employed. Once you realize how tedious and time consuming it is to tend to your finances you will start to see accountant’s fees more as an investment rather than an expense.
ACCOUNTANTS SAVE YOU MONEY
Accountants, especially CPA’s, cost quite a hefty fee. This fee starts to matter less and less the more your accountant saves you money. Purchasing the services of a good accountant will more than pay for itself. Accountants can help you increase your business savings by being savvy about your deductions and tax exemption options. Best part, it’s legal!
Another way a good accountant can help you keep your spending to a minimum is to advise you when to lease or buy, if you have real estate, or by helping you avoid fines by filing your taxes properly.
HELP YOU WHEN YOU GET AUDITED
Sure, less than 1% of the U.S. population gets audited in a year but if you earn upwards of $200,000 annually or are a business owner, your chances of being part of that 1% increases.
Accountants can help you put your finances in order so that you are paying just the right amount of taxes (not too little, not too much), essentially keeping you off the radar. In the event that you do get audited, your accountant can guide you through the auditing, or personally work with the IRS on your behalf.
KEEPS YOU UP TO DATE WITH RULES AND REGULATIONS
Accountants know the tax code inside and out, and they are required to be updated with new rules and regulations that come up. Seeking the help of an accountant that is well versed in your line of business can help you stay out of trouble with the IRS all the while taking advantage of tax breaks and steering clear of unnecessary fees.
STREAMLINE YOUR OPERATIONS
Accountants, usually with the help of your lawyers, can streamline your operations by identifying what type of ownership structure or entity your company should have. You might take this for granted but different entities and ownership structures have their own advantages and disadvantages and your accountant will be able to help you decide which structure makes the most sense for your company, financially.
PEACE OF MIND
Running a company, whatever size it is, is no joke. Today you are a CEO signing off on all of the major decisions, tomorrow you are part of the maintenance team making sure the elevator functions well so that your clients don’t have to take the stairs. Being self-employed requires you to be able to multi-task but have laser focus at the same time. Knowing that somebody capable is at the helm of your finances can help ease the burden of running a business.
ADDITIONAL OPTIONS: HIRING A FINANCIAL PLANNER or BOOKEEPER
If you think hiring an accountant is too big an investment for the kind of financial work you need done, another option is hiring a bookkeeper and/or a financial planner. To help you understand which of these people fit your business needs better, read on.
HIRING A BOOKEEPER
A bookkeeper can be likened to a financial concierge. They help put your finances in order by paying your bills, balancing your checkbook, and making sure your credit card statements are updated and paid on time. Bookkeepers are also trained at tax preparation. Their fees tend to be cheaper too, so if you only require the bare minimum for your business maybe hiring a bookkeeper for now is enough.
HIRING A FINANCIAL PLANNER
Financial planners make money in two ways: by providing you sound financial advice and through commissions from the products they sell you. If all you are looking for is some advice on how to create a budget, build your wealth, get out of debt or start investing, you might be better off with a financial planner instead of an accountant.
In our humble opinion you will need a personal accountant if you belong to the following:
- Business owner
- Self-employed professional
- Own rental real estate properties
- Wage earner with businesses and investments on the side
- Stand to inherit a huge amount of money
- Plan to give away a huge amount of money