5 Reasons Why A Business Accountant Is So Important

business accountant

business accountant

When running a business it is quite tempting to cut down on costs and save up by managing the finances yourself. Most business owners do this and sooner or later they realize that it was wrong to do this. Financial aspects and matters of a business are delicate matters and they require a dedicated person to handle them. One person whose sole job is to manage, record, and give advice to the business owner about finances, should be there. It goes without saying that a business accountant is crucial for a business’s success and growth.

Why is a business accountant important?

1. An Accountant Helps Manage Expenses

This is by far the most essential role a business accountant plays. They help owners keep an eye on all the outgoing and overheads. Having a business accountant to do this can help business owners save a lot of time which they can use to work on growth and expansion.

Particularly in the first few months, a business accountant is vital for a business and they help it survive and excel towards maturity.

2. An Accountant Helps Cut Down Costs

Hiring a professional business accountant obviously means you will have to spend a substantial chunk of money. Look at it as an investment in the long term profitability and life of your business. Accountants are aware of the best legal loop holes from which businesses can benefit immensely to cut down on costs. They are also skilled at advising businesses from year-end accounts to tax returns and preparations which can significantly help you save large amounts of money.

If hiring an accountant as a full time employee is difficult for you, you can decide on a pay-for-services model initially, to keep track of how an accountant’s services can possibly excel your

business growth in the long-term.

3. An Accountant Gives Professional Advice

small business accountant

small business accountant

A good business accountant does much more than just keeping records. Knowing your business’s finances to the core, they can offer you valuable advice. Professional business accountants are experts at offering an unbiased and objective view of your business.

A business accountant can serve as an invaluable asset for startups and small business owners by offering the right financial advice that can help you stay in business for the long term.

4. An Accountant Will Save Your Time

Look at all the things an accountant can help you accomplish, and then look at your duties and the time constraints. It is often quite tempting and motivational for business owners to manage their own accounts but it is always advisable to delegate things to reliable specialists if you are serious about your business. This gives you a lot of time which you can spend on other business growth aspects.

5. An Accountant Helps You in Audits and Legal Issues

Getting audited and checked by government authorities is a nightmare for businesses whose accounts are managed by the owners. A professional business accountant will handle all your audit related issues in a better way. Given that they are efficient and well aware of all the records, you don’t have to worry about tax season or audits. Skilled accountants also offer you great advice on legal financial issues.

Finding the best suitable business accountant might seem like a difficult task. Once you do, your business is bound to prosper!

Small Businesses in the US: Why They Matter More Than Ever – Infographic

Small Business Accountants Matter

What would our country be without small businesses? The team here at GoodAccountants.com put together this infographic to show just how vital small businesses are to the American economy. GoodAccountants.com provides bookkeeping and auditing services to help small businesses thrive in today’s market, by saving money and keeping finances in order.  Outsourcing bookkeeping and other financial services gives small businesses the leverage they need to stay afloat amongst large corporations.

Small Businesses in the US: Why They Matter More Than Ever – Infographic

Your Small Business Accountant Explains IRR

IRR- Internal Rate of Return

Small Business AccountantThe IRR is a percentage value which explains the way we got from the initial portfolio value to the current portfolio value, taking into consideration all the money taken out of and put into the portfolio along the way. Since most people need to add and subtract cash from their invested assets over time, the IRR does a significantly better job of explaining changes in an investor’s wealth than the annualized return does. Sometimes your small business accountant will notice that the IRR for the same portfolio is lower in this example because the IRR takes into consideration the fact that a large contribution was made to the fund right before a large downturn.

Most investment advisors are not interested in providing their clients with an IRR as a performance measurement. First, providing the IRR requires a log of all transactions into and out of a client’s portfolio. Moreover, IRRs can often be less flattering to investment advisors’ performance than annualized returns are. Despite the resistance to provide an IRR, individuals should insist that their financial advisors provide such a measure in order to get a clear idea of the progression of their wealth over time.

Risk-Adjusted Performance Measures

IRR is not a perfect performance measure because it does not account for the riskiness of investments in computing the return accrued to the investor. Much more important than the return to investors is the return per unit of risk. Just as it is unreasonable to assume that equities are always a better investment than government bonds, so too, it is unreasonable to judge investment managers based solely on their returns without considering the risks they take.

There are a few standardized measures of risk-adjusted return, but these, too, are imperfect performance indicators. Each one measures risk as the volatility of returns rather than the risk of permanently losing money. For wealthy individuals, who often have sufficient cash or incomes to weather short-term volatility, these measures fail to encapsulate the role of an investment manager or advisor.

A Reasoned Approach to Performance Evaluation

It is crucial that clients evaluate their investment professionals based on a combination of factors rather than any one single number. IRR and risk-adjusted performance measurements are useful because they measure some very important aspects of investment performance.

In the end, IRR, risk-adjusted returns, and other performance factors should all be considered by clients looking to get a comprehensive understanding of a financial professional’s performance. Clients should insist on the availability of all these important pieces of information so that they can make informed decisions.  When you’ve entered the investment game, it’s important that your small business accountant get involved with your portfolios and IRR quotients.