How an Accountant Can Help Prevent Bankruptcy

"Hiring an accountant is for big businesses only." This is one of the most common misconceptions of...

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“Hiring an accountant is for big businesses only.”

This is one of the most common misconceptions of accounting services. They seem to be more of a luxury than a necessity for small business owner. But in reality, an accountant can not only help you fill out your government tax forms, they can also help you save more time and money. This savings will allow you, the small business owner, to focus more time and attention on the revenue generating activities necessary to grow your business.

Time Management

As a small business owner, there is a high chance that you like to control your business from start to finish. You set your own working hours, regulate your workload, determine your finances, and create your solid business strategies. However, small business owners often find themselves tired and overworked, partly due to taking on all the workload instead of delegating it to the right person.

How an Accountant Can Help Prevent Bankruptcy

Delegating your financial tasks to the right accountant is a great start. You need to carefully choose a reliable accountant that you can trust with your company’s accounting needs. Once you’ve delegated the accounting tasks to the right person, you will have more freedom to focus on the revenue generating aspects of your business. The right accountant can help out on many different areas for the growth of your small business. They can handle much more than just your tax returns and payroll.

Cash flow advice

Failure to manage your cash flow correctly can lead to bankruptcy. A qualified accounting service can help you make sure your cash flow is keeping up with any expenses. They should be able to review your cash flow history and make recommendations for improving areas such as your accounts payable and accounts receivable. Better AP/AR management will mean less reliance on loans/cash advances. This will save you money in interest payments in the long run.

Cost control

Every business has bills to pay from overhead to utility bills. An accountant can check the way your overall business is running, look where expenses are coming from and advise you on how to keep those expenses to a minimum. This analysis should include areas such as overtime, which can cause a drain on the small business owner’s profits.

How an Accountant Can Help Prevent Bankruptcy

Knowing where you stand

Having a clear picture of your overall financial situation allows you to make timely and sensible decisions. Most people need some help reading their financial details such as Balance Sheets and Profits and Loss. This is where an excellent accountant comes in to assess your financial standings and provide essential advice to help keep your business running.

To learn more about small business accounting, visit our website today.

Resources:

Chih-Fong Tsa. Feature selection in bankruptcy prediction

Narayan Vaish. Book-keeping and Accounts

M.Jambunthan. Book-keeping and Principles of Commerce

Newton, Grant. Bankruptcy and Insolvency Accounting, Practice and Procedure. 2009

Turner, Leslie. Accounting Information Systems: Controls and Processes. 2008

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