Blue Heron Bookkeeping Articles
5 Reasons To Find An Accountant For Your Business
I want to bring solutions to people within our community around The Villages, FL. I run Blue Heron Bookkeeping, a bookkeeping and accounting firm, which focuses on helping those who run businesses within our community. We provide bookkeeping services and accounting services in The Villages, FL and surrounding area. I want to give back time to owners so they can focus on their product. I also want to reduce costs to owners, making it more advantageous and easier to scale out the business. This, in turn, allows them to provide greater value to the community.
Though I hold a bias because I know what we can do, I believe that the accounting profession as a whole is heavily underutilized. Not unique to business size, I find small businesses and large businesses who heavily underutilize accounting experts. The point of hiring someone from the accounting profession is to better understand what happens with money in your business. For instance, accountants will be able to answer: Are sales on target this month? Which product is making me the most money? Who owes me money? Who do I need to pay? Through this understanding, it builds a better knowledge base on what business owners need to look for in daily operations and how they may be able to improve their situation. So where do you, the business owner, start and what services should you request?
Starting A Business
When starting a business, the majority of owners believe that doing everything themselves to save money will lead them to be profitable sooner. A good CPA who understands your industry can advise you on the impact of your organization type (partnership vs. S Corp), how to obtain funding, along with prioritizing your focus on things you need to do prior to becoming fully operational.
The advice you receive will make sure you set up the business how you want, while also bringing awareness to the financial impact of each organizational type. A CPA will also explain how to position yourself the best for funding your business if you need extra capital. By positioning yourself correctly and appearing prepared by the banks, it may reduce your interest rate and make sure you receive the right amount of funding. A lower interest rate will help prevent the business from running out of money prior to becoming profitable. Finally, a CPA can prioritize what you need in order to get started. This could be provided through a checklist or calendar which will save you significant time and money.
Running Out Of Time
Have you ever gotten home, exhausted, jumped into bed, and pushed your bookkeeping work until tomorrow? If you are running at maximum capacity, it will make you more money to offload the bookkeeping and accounting functions of your business. This relates to a backwards philosophy held by many business owners, “reducing costs always saves money”. The principle, which we call opportunity cost, is the primary analysis to perform here.
We have a certain amount of time we, as business owners, can work. There are 24 hours a day, 6 of them we sleep, and the maximum work hours which most people can sustain on a daily basis is 10 hours, 3,650 hours a year. This is one of the many reasons we hire employees, to increase our capacity. Unfortunately, as a way to save money, business owners choose to overextend themselves rather than focusing on their product and the growth of the business.
As a way to extend your capacity as a business owner, outsource your bookkeeping services and/or find an accountant who is capable and willing to provide consulting services analyzing costs and revenues for your business. By doing this, you allow an accounting expert to free up your time and make sure you do not overextend yourself. In almost every case, this has significantly impacted a company into growing and having larger profits.
Budgeting/Forecasting
You should build a budget and a cash flow forecast as a business owner. This ensures that you can recognize what is going well and where you are spending more money than needed. If you cannot or do not feel comfortable creating a budget yourself, it is time to find an accountant or CPA.
A CPA and most accountants will be aware of standard operating procedures and will most likely be able to create a budget from your prior year financial statements. A CPA will also be able to work with you to create assumptions through specific questioning that identifies where differences may arise from the prior year. The CPA will ask questions related to your goals and what you expect to be different within your operations in the current year. By creating a budget, you not only can identify differences between your own expectations, but it can also keep you more accountable towards your goals and aspirations as a business owner.
New Product or Service
What is the impact of a new product or service on my current business and what is the likelihood that rolling out my new product will bankrupt my business?
This is the question that should be asked by every business owner when creating a pivot within their business. The best way to protect yourself when bringing on a new product is to understand the impact. A new product or service might be a small change from the overall operations but it could have large financial ramifications for the business as a whole.
A CPA or an accountant can help perform a forecasted financial statement to understand the impact of the addition. Forecasted financial statements with and without the product will allow you to see the expected net income for further tax liabilities along with what additional costs should be incurred. This can become a large asset for you as a business owner to identify your own financial health and to develop proper expectations.
Clarity of Business Operations
There are companies that don’t know how much money they have made in the first half of the year. Some companies wait for the preparation of their tax return to see how much money they made during the year. Clarity of business operations and where they sit financially is the only way to run an efficient business.
A CPA acting as a controller or a bookkeeper can create clarity of business operations. It is crucial to make sure you file your quarterlies, payroll taxes, and sales tax properly. It is crucial to have accessible income statements and balance sheets so that you can make the proper decisions and understand whether you have financial hardships coming up. By establishing clarity of business operations, you will avoid fines, penalties, and excess costs which will make your business more profitable now and in the future.
Whether using Blue Heron Bookkeeping, another individual, or another accounting firm for your financial needs, you will find large benefits. We are here to help as a bookkeeper, accountant, and a CPA. We understand that acting as a business partner to you and your business will create a lasting relationship. Your growth will become our growth, therefore we are personally incentivized to make you the best business we can.
I hope this article has helped you identify why and how to use an accountant. Please do not feel stuck in your journey and your business, we are here to help. Feel free to contact us at Blue Heron Bookkeeping for any questions or more information. There are many additional ways we can help you prepare your business for growth or just to give you time back with your family and to focus on yourself. We look forward to hearing from you in the near future.
I want to bring solutions to people within our community around The Villages, FL. I run Blue Heron Bookkeeping, a bookkeeping and accounting firm, which focuses on helping those who run businesses within our community. I want to give back valuable time to owners so they can focus on their product. I also want to reduce costs to owners, making it more advantageous and easier to scale out the business. This, in turn, allows them to provide greater value to the community.
Managing Partner of Blue Heron Bookkeeping
BlueHeronBK.com