Ask any small business owner what their biggest mistake was their first year and quite a few of them will answer, “Trying to do it all myself”.
Accounting is a case in point.
Many small business owners never do hire one, believing that they don’t need any help keeping track of the money or doing their taxes until sometime “down the road” when their business grows to the point that their accounting and tax needs get complicated. They don’t see any need for a “bean counter” until they have lots of beans to count.
Find an Accountant Before You Even Start
Yet one of the first things you should start doing, even before your new business opens its doors to the public, is working with an accountant; he or she can be the best business partner anyone could ever have.
That’s because accountants aren’t just bookkeepers or tax filers. Their most valuable role is as advisors. You don’t hire one for their ability to fill out and file tax forms, for example; you hire one because their expert knowledge will provide you with potential tax benefits you would have known nothing about without their advice.
Similarly with keeping track of the money; you can certainly record what comes in and what flows out, but do you know what a chart of accounts is or the GIFI? An accountant does, and even better, knows how best to apply them to your small business’s finances.
Think about all the questions you had when you were first starting your business.
How should you legally structure your business? Should you incorporate? How do you pay yourself if you do? What happens if you hire your spouse as an employee? Do you have to register for GST/HST?
Now imagine having an expert on tap who could answer all of those questions for you – and explain the tax consequences of your decisions. That’s what an accountant can do for you.
Not Just for Starters
If you didn’t hire an accountant when you were first starting your business, it’s certainly not too late. Questions arise at every stage of a business’s life and every small business can benefit from the tax planning and compliance advice an accountant can provide. Accountants can also help small business owners with their exit and/or succession plans.
And the sooner you get an accountant working for your business, the better; as he or she gets to know you and your plans for your business, the more effective your partnership will be.