Accounting: Making Sure 2 + 2 = 4

Small Business Owners: 2 Benefits of Hiring an Accountant

20 September 2017

Dwayne Barnes

Statistics compiled by the Australian Bureau of Statistics suggest that over 60% of small businesses in the country stop trading within the first 3 years of operation. If you are a small business owner who is trying to grow their customer base and market share, it is likely these numbers will give you some cause for concern. One of the major reasons that small businesses fail in the first few years is financial mismanagement. Below is a guide to how an accountant can help your business to not only survive but also to thrive and grow.

Budget planning

Budget planning is the key to running a successful business. If you fail to accurately budget, or if your budget is unrealistic, you will eventually find that you have run out of money entirely. Ideally, you should contact an accountant before you start your business operation so that they can give you professional advice on the likely start-up cost as well as creating a projection of income and outgoings for the first year of your business. However, if your business is already up and running, it is never too late to call in an accountant who will be able to review how your business is doing before offering financial advice on what you need to do to be successful. Accountants will have access to powerful software which can be used to track the performance of your business.

Managing the cash flow

Learning to manage your cash flow can be difficult. The cash flow is the amount of money which is moving into and out of your business at any one time. Ideally, you should always have more money moving into the business rather than moving out of it. If you fail to do so, you could find yourself unable to order new stock or to pay your staff. One reason for cash flow problems is unexpected payments which you need to make. These unexpected payments will often take the form of taxes which you have not factored into your financial planning. An accountant will be able to assist you in managing your businesses cash flow by identifying all of your tax obligations in advance, so you can make sure that this money is factored into your business plan.

If you would like to find out more about how an accountant can help your small business, you should contact an accountancy office today.

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About Me

Hello. When you are at school, maths can seem so complicated at first. But then you learn about numbers and all of sudden everything seems as easy as 2 + 2 = 4. I used to be pretty good at maths so when I started my own business, I didn't think I needed to hire an accountant. After all, why should I pay someone else to do something that I could do myself? However, I very quickly learnt two important lessons. Lesson one was that accounting and doing the books will take a lot longer than you might think and, secondly, it is actually pretty complex stuff. In the end, I decided to hire a professional accountant. He is great and he has taught me a lot of cool stuff.