admin posted on May 06, 2009 17:10
ACCOUNTING ISN'T REALLY A DO-IT-YOURSELFER
It’s boring, confusing, and time-consuming, but every business needs it to survive—can you guess what it is? It’s accounting! When asked, most small business owners believe an accountant is just an overhead expense and not an important piece to their business. In reality, bookkeeping and accounting are critical to keeping a company afloat. They help owners track, control, and monitor the money that goes in and out of the business. Even the smallest of businesses need an accounting system.
Accounting software such as QuickBooks, Peachtree, and Quicken can speed up the record keeping process, but it doesn’t take the place of an accountant—the programs are only as accurate as the numbers plugged in. Even if you tackle your own bookkeeping, it is a good idea to hire an accountant to review your books either monthly or quarterly. Accountants will double-check and analyze the bookkeeper’s numbers to look for trends, mistakes, and problems. They can help owners comply with tax laws to avoid trouble with the IRS. Accountants are also a great resource for consulting advice.
Accounting takes a great deal of time and effort to keep up-to-date—most business owners do not have enough time or knowledge about accounting functions to do it themselves. Many companies get into trouble because they haven’t kept track of payroll, or because they haven’t been withholding and paying employee taxes. The IRS has zero tolerance in this area and doesn’t allow any wiggle room. An accountant will keep track of the ever-changing tax laws and employee reporting rules, so you won’t have to.
Keeping accurate books and working with an accountant becomes increasingly important at key points in a company’s history, including making big purchases or selling the company. Banking institutions, creditors, and buyers won’t do business with you if your books are not in order. Loads of paperwork and certain reports are required when applying for a loan or selling a business, which can become either overwhelming or a complete disaster when not done right. An accountant can help make sure a complete and professional proposal is put together for you to present. Your chances of receiving an accepted offer will increase if you are well prepared.
Businesses should shop for accountants like they would shop for any vendor. Ask about the experience they have with your size of business and the type of industry you’re in. Decide if you want to work with a larger accounting firm, or a smaller accounting firm. A co-owner of a home-improvement product retailer prefers to work with a smaller accounting firm because she thinks they are more responsive and sometimes cheaper. “I get my questions answered quickly, and I’m not being charged for every 15 minutes,” she says.
Accounting can be a large and complex part of each business. Almost every piece of your business has a tie to the accounting department—anytime money is made or used, the accounting department is involved. Wherever a sale is made, new products are created, or a loan is acquired, the laws of accounting will apply.