5 Reasons You Need An Accountant If You're a Business Owner

5 Reasons You Need An Accountant If You're a Business Owner

by Brendon Pack, January 2017

Perhaps you operate a secondhand clothing shop, or you're a sales consultant who travels the world. Maybe you produce addicting video games for smartphones. No matter what your trade entails, being in business is challenging.

That's why having a corporate accountant to lean on can mean the difference between long-term sustainability and bankruptcy. Here's why you need the support of an accountant if you work for yourself.

1. Small business accounting is very time-consuming.

You have phone calls to return, e-mails to reply to, and sales to make. You may even have employees to manage or flights to catch. The bottom line is that business ownership is a 24/7/365 endeavor.

In addition to preparing the actual filings, estimates show that if you spend an hour per day doing bookkeeping, you'll wind up losing six weeks per year examining receipts, spreadsheets, and bank statements. You simply can't afford to lose even a fraction of this valuable time doing something that won't make you a penny of profit.

You likely don't even have the time to worry about all of your business tax requirements. This is where an accountant can be a lifesaver. You can simply provide all of your financial records, bookkeeping materials, and payroll information to an accounting professional, and this individual can help you save countless hours each year, leaving you free to focus entirely on your top business priorities.

2. Most entrepreneurs aren't CPAs.

Statistics from the Small Business Administration estimate that there are about 30 million small businesses in the United States. The entrepreneurs behind these companies are experts at what they do, but most are not trained in accounting.

Because small business accounting is far more complex than filing a personal income tax return, it makes little to no sense to attempt to learn the mind-numbing minutia contained within the 70,000-page federal tax code. It's better to let an experienced corporate accountant who is adept at handling clients in your specific industry take care of your filing and business structuring needs.

3. Your tax audit risk goes up when you're in business.

Owning a business and earning more income both come with a higher risk of getting one of those dreaded “audit" notices in the mail. Among all business owners, sole proprietors tend to get audited the most. If you maintain a formal business entity, such as an S corporation or LLC, you may reduce your chances of an audit, although it's not a foolproof measure.

Either way, you don't want to deal with an audit all by yourself, so this reason alone should be enough to convince you to use an accountant.

4. You can't afford to miss out on critical tax savings.

While having a business is a large financial burden, the IRS offers a nice selection of tax deductions and tax credits to hardworking business owners. It can be challenging to try to identify all of the tax breaks for which you qualify—and to determine which measures apply specifically to your industry.

That's why having small business accounting support could help you save thousands of dollars each year, depending on the size of your business. Plus, you certainly don't want to take a deduction you aren't eligible for and then get in hot water with the IRS.

5. Tax fraud affects everyone, including business owners.

Tax fraud is an increasingly prevalent problem today. Each year, scammers claim billions of dollars from innocent filers through tax refund schemes and other illegal tactics.

By using the services of an accountant, you can ensure that all of your business filings are handled properly and on time, which reduces your chances of being a tax fraud victim. In the event that something does happen, an accountant can assist you in working with the IRS and other authorities to help resolve the issue.

Building a sustainable business entails engaging the right professionals along the way. If you're not a web designer, you wouldn't be the best choice to design your e-commerce site. While there may be a place in your business for the occasional DIY solution, you'll be well served by having an experienced accountant handle your business taxes.