Helping owners of businesses not just to stay on top of their finances but to stay afloat, even in times of economic hardship, accountants can (and should) play an integral role in any business. But, for cash-strapped entrepreneurs and small business owners, the question of whether to hire an accountant may be one that isn’t quite as easy for them to answer as it is for bigger corporations.
While there’s no doubt that small businesses would benefit from an accountant’s wisdom, guidance and support, with a smaller budget to work with, they may well ask themselves if they can afford to hire one. Thereal question should be, however: “can I afford not to hire an accountant?”
Let’s look not just at how small businesses can benefit from hiring an accountant, but what they could be putting at risk if they don’t.
Risks of not hiring an account
There are numerous problems your small business could run into if you decide not to hire an accountant, and here are just some of them:
- Poor decision making
Helping you to keep tabs on the financial successes and failures of your business, an accountant can encourage you to make better financial decisions that can have an impact on your company as a whole.
By analyzing accounting data, you can make well-informed decisions about a whole host of things, such as whether to purchase new equipment and when, right up to whether you should hire new intake or try and scale back by reducing your workforce. Some poor decisions you make could affect your business in the long term, and be very difficult to make good again.
- Problems with cashflow
Without the dedicatedtracking of daily business expenses – such as that which an accountant would do–cashflow problems can quickly and easily become out of hand. Without an accountant to keep a close eye on your daily finances, you may find yourself facing a whole host of financial problems that are complex and lengthy to correct.
- Inability to grow
Expansion might well be in your business plan, and why shouldn’t it be? If you’re doing well and want to try and reach a wider audience or add more products and services to those you already offer, this will be impossible to achieve successfully, without a thorough review of your company finances, as provided by an accountant.
With an accountant’s help you can draw up statements that will help potential investors and lending institutes perceive you as a viable candidate. Without an accountant’s help, you may struggle to prove that your business is healthy and would benefit from growth and expansion.
- Internal fraud
Without strict policies related to accounting put in place, and an accountant, you put your company at an increased risk of internal fraud; which can occur even if you think you can trust those who work for you.
With checks and balances brought to your business by an accountant, you can give yourself the best chance of avoiding internal fraud, and keeping your business financially secure and healthy.
- Unpaid invoices
It’s important to keep on top of invoices, and to pay them promptly to maintain loyalty among suppliers. With a sound accounting system put in place by an experienced accountant, you can automate invoices and never risk missing one again.
The risks mentioned above are very real, and if you don’t hire an accountant – even on a part-time or remote basis – your business could soon end up suffering in ways it simply need not.