For a small business owner, managing the financials is a crucial part of your overall success. But being a small business owner doesn't mean you're an expert in all things financial—nor should you be.
That's why it's important to contract with an accountant who can address your questions and concerns throughout the business year. These financial professionals are helpful at tax time, of course, but there are various other issues on which they can consult and steer you in the right direction.
“Small business owners should be keeping in touch with their accountants if there is any significant change at all in their business," says Jill Kuksa, CPA, owner of HTH Accounting in Chicago. “And also when there is going to be any major financial decision being made."
Here are six instances when Kuksa recommends you seek an accountant’s input:
It's crucial for small business owners to understand cash flow so they can make the best budgetary plans for benefits, insurance and other options. “Businesses don't generally go out of business for lack of sales, they go out of business for a lack of cash," Kuksa says. This is especially important for a business in growth mode, which may have more money going out than coming in.
The break-even point occurs when your total income equals your total expenses. Your accountant can use measurements to figure this out for you. By knowing this figure, you can see if your company is profitable or losing money.
An accountant can run the numbers to determine the financial advantages of providing raises versus benefits. (The latter is tax deductible—find out more here.) She can also help you determine when hiring a contractor may be a better decision than bringing on a new employee.
If you need funds for a project or to cover expenses, talk to your accountant about your options. A CPA tends to have contacts with different banks and can point you in the right direction. “We know which kind of bank is going to work well with the client, and we generally know how to get them ready to present their paperwork to the bank, which is critical," Kuksa says.
Whether you're buying a building, selling a building, or buying a large piece of equipment, it's worth the call. That includes buying or leasing a vehicle for the business. The accountant can determine how you're going to handle the purchase or sale, what type of depreciation you'll take on it, and whether you qualify for any incentives.
At a minimum, you should meet with your accountant six to eight weeks before your fiscal year ends. That way you can take advantage of any tax law changes and take action on anything that's going to be required of you to save money on taxes. “Once the new year starts, you're pretty much done," Kuksa says. “If you wanted to establish a retirement plan, for instance, it has to be done before the fiscal year closes."
When you're looking for the best accountant for you, consider whether you'll be billed for phone calls. “We don't charge for phone calls because I don't want to scare people off from talking to me about something," Kuksa says. “Small business owners have to like their accountant and feel comfortable with them."
Disclaimer: This content is intended for informational use only and should not be construed as medical, legal, financial, or other professional advice.
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