Why Professional Accounting is the Last Expense You Should Cut
Why Professional Accounting Should Be the Last Business Expense You Cut
Many small to medium business owners are having a tough go of it in Alberta's post-boom landscape. When the road gets rocky, all a company can do is to keep their bottom-line black is to increase revenue, decrease expenditures or some combination of the two. Unfortunately, sometimes when we try to reduce our expenditures by cutting back on professional expertise, such as accounting services, we end up being "penny wise and pound foolish".
Spending Now; Saving Later
There are enormous advantages to using accounting expertise with proven competency, besides the peace of mind knowledgeable experience brings to your ledger. Mistakes made by those trying DIY accounting can lie in wait, sometimes even for years, before the consequences leap out to bite them in the butt. Choosing the wrong kind of business structure, for example (sole proprietorship versus incorporation) for your new company can cost you dearly in tax implications and liability exposure.
What A Designated Accountant Can Do For You
A professionally accredited accountant who has demonstrated proficiencies in the provision of financial advice can help you navigate the treacherous waters of corporate finances and actually save you money. Here are some of the ways a Chartered Professional Accountant (CPA) such as myself, can make a difference in your company's profit picture:
- Provide financial analyses of your business plans to ensure they are possible, legal and conform to proper accounting principles.
- Provide guidance in choosing appropriate accounting software, the correct type of business bank accounts you will need and that they all comply with Canadian law.
- Demonstrate strategies for accurately tracking business expenses and the best ways of keeping them separate from personal expenses; which is vital for proper tax filing with the least amount of paperwork.
- Properly report independent contractors to differentiate them from employees.
- Explain financial reports in understandable language so business owners understand their finances as completely as their accountant does.
- Providing estimates of the tax implications of all of your operations to ensure you are setting aside enough to avoid a surprise tax bill in the future.
- Act as a liaison between the Canadian Revenue Agency and your company.
- Assist in identifying trends in your financials, such as inventory management issues and areas of potential growth from cash flow patterns
- Provide advice for avoiding an audit and in helping you respond if you do get singled out by the CRA.
- Produce forecasts to help you see the way forward in all your financial matters based on historical trends and recent changes.
- Ultimately, to aid with selling or winding down your business after you're filthy rich and ready to retire.
These are just some of the ways a CPA can help you conduct your business smarter, leaner and allow you to save money while being better informed about the financial health of your company. When you are looking at creating a new business, managing your current one, or reinventing your business model, having designated financial expertise in your corner isn't just nice to have, it's a necessity. It is the one budget line that affects all the others.