Smart business software can automate a lot of the things you do manually. Smart software will even send reminder emails to clients who haven’t paid so you don’t have to. They also know which lenders are playing ball at any one time, so you can approach the right people for finance. It’s money that was held by the government while you could have been investing it in your business. The easy answer used to be that they wore suits and sat behind big desks. Applying for a loan is both an art and a science. It can be lonely, too. Use Xero Learn to support the delivery and teaching of beautiful financial lessons using Xero. You’ll end up with a set of key performance indicators (KPIs) that tell you how your business is doing. It’s almost impossible to do so without accurate financial records produced through accurate accounting. Even a highly active business won’t last long if payments are slow to come in, or expenditure is too high. You can find a nearby advisor now if you’re in Denver. Business accounting consists of three basic activities: identifying, recording and communicating the economic events of a company. Tax accounting is all about making sure that you don’t pay more tax than you are legally required to by the IRS. Because if they can’t solve your business problem themselves, they’ll know who can. As your business grows, it can be difficult to keep track of all your tax information reporting obligations. You’ll be paying them to produce reports that provide regular updates on the company’s financial health and help you interpret those reports. Accounting tells you whether or not you’re making a profit, what your cash flow is, what the current value of your company’s assets and liabilities is, and which parts of your business are actually making money. You may not be planning to court investors or sell your business right now. Reports, playbooks, books and guides to contribute to your success. You’ll know the real cost of doing business. They'll do that by considering the numbers behind your business and looking at how your debt's structured to develop a specific strategy for you. So what does an accountant do? Accounting and bookkeeping overlap in many ways. They’ll also set you up with invoicing systems that tell you what’s been paid and what hasn’t. The cost of doing business can climb quickly with things like: Do you think about these costs strategically? Chasing those debtors is a distraction you don’t need, but you can’t afford to ignore the problem. An accountant will tie it all together in a presentation that sells the wider vision for your business. You’re doing cost accounting whenever you’re trying to figure out how to increase your margin, or deciding if raising prices is a good idea. Are margins thinner? Accountants can help you figure out what’s important. Some say bookkeeping is one aspect of accounting. Detailed budgeting can eat up a lot of your time and energy. There’s more to tax than completing and submitting your returns. They’ll also remove or automate administrative tasks that distract you from your core business. No pressure, no credit card required. Some accountants will even call businesses that don’t respond to emails. This post is to be used for informational purposes only and does not constitute legal, business, or tax advice. That’s what generally accepted accounting principles (GAAP) are: a series of standards and procedures that accountants at all companies must adhere to when preparing financial statements. Being in business is tough. The question is what don’t they do. Accountants know that revenue ebbs and flows, and that costs do the same. They’ll help you predict the effect on cash flow and come up with strategies to manage the situation. If you that doesn't work, you still have options. Get ideas on running your practice in our accountant and bookkeeper guides. Solid accounting gives you complete, accurate financial records, which reduces your risk of breaking tax laws. Your financial advisor can step in here too. But if you want to break them apart, you could say that bookkeeping is how you record and categorize your financial transactions, whereas accounting is putting that financial data to good use through analysis, strategy, and tax planning. An accountant can do that for you. Bench assumes no liability for actions taken in reliance upon the information contained herein. Has your cost of goods sold increased? They’ll work out the cost of hiring, training and paying an employee to make sure you can afford it. Accounting also … Together, they tell you where your business’s money is, and how it got there. And they’ll use powerful forecasting tools that loan officers trust. They'll organize cash reserves and come up with a spending plan that ensure there’s always money in the bank. Many profitable businesses fail because they run out of money at the wrong time and can’t afford to pay suppliers or staff. Do you spend a lot on storage, or lose money writing off obsolete or damaged goods? They’ll help you troubleshoot the issues, test solutions, and reset your KPIs as needed. You’ll be armed with graphs and charts that visualize the numbers – allowing your lender to literally see the opportunity. Sometimes it’s hard to know where to focus. But it’s a good idea to leave your options open. Every great journey begins with a roadmap. They’ll figure out what sort of hire will boost business the most. And you’ll know what you can pay yourself. They can set up invoice systems that send automatic reminders to customers when their bill is due and/or overdue. If you don’t have the time or expertise, that’s something an accountant can do for you. It can be lonely, too. Depending on an accountant's specialty field and position within a company, he or she may perform any of the following duties: Scrutinize financial documents to make sure they are … Get resources and support for building apps and integrations using the Xero API. Your accountant can take the headache away. Tax accounting is regulated by the Internal Revenue Service (IRS), and the IRS legally requires that your tax accounting adhere to the Internal Revenue Code (IRC). Accounting is how your business records, organizes, and understands its financial information. Without financial statements, you won’t have an objective answer. Accountants do more than you think. They’re generated much more frequently—often on a quarterly or monthly basis. There are so many moving parts in a business. Friends don’t let friends do their own bookkeeping. They’ll also help you get payroll right, including complying with government paperwork, tax and insurance requirements. Up-to-date financial statements demonstrate where your company stands. If you need refinancing, they'll take care of that too. They can give you strategic advice and come up with clever ways to save money or boost revenue. You should be able to have very frank conversations with them so find somebody you like. They can reassure and reset you on your journey. There’s good debt and bad debt. You can tell you’re paying too much in taxes if your business is consistently receiving large tax refunds. Each person should consult his or her own attorney, business advisor, or tax advisor with respect to matters referenced in this post. Smart inventory management is critical to doing good business. It’s not just blanket advice. They can also provide you with knowledge and insight that is simply inaccessible to non-accountants. They can bring a ton of extra capability and insight into your business. Financial statements are reports that summarize how your business is doing, financially. When a customer owes you money, it appears as Accounts Receivable (AR) on your balance sheet. Nothing beats a recommendation from someone you respect and trust so ask friends, family and business partners what they think of their accountants. Or do you sometimes lose revenue because you run out of stock? You need to know it will make money – and you need to convince investors and lenders of the same thing. Cost accounting involves analyzing all of the costs associated with producing an output (whether it be a physical product or service) in order to make better decisions about pricing, spending and inventory. Get an accountant and you’ll run your business with more clarity and confidence. The balance sheet tells you how much of your AR you’ve already pocketed during the month, and how much is still outstanding.