It’s almost Halloween. If you run a small business, there’s nothing spookier than the feeling that you don’t know where your money is going.
Getting your accounting in order is a crucial step to stay profitable and grow your business.
Are accounting missteps holding you back? Here are three scariest accounting mistakes we see business owners fall into, plus strategies to avoid them:
1. Misclassifying employees
More and more businesses today are hiring non-traditional employees like consultants, freelancers, independent contractors, and part-timers. Hiring this type of talent results in labor cost savings, reduced liability, and flexibility in hiring and firing.
However, there has been a corresponding uptick in the number of employees who are misclassified. As tempting as it may be to classify a full-time employee as a contractor, doing so can result in costly fines and penalties that will trip you up down the road and hurt your bottom line.
2. Not knowing the status of their financials
At CSI, we have had clients come in with up to 18 years of back work to get cleaned up and caught up. In addition to letting their books fall far behind, this also causes penalties and interest to accrue with the IRS and the state, and makes a huge mess for an accountant to sort out.
Keeping up to date on your financials may require more of your time upfront. But you’ll save valuable time down the road. More importantly, keeping your records up to date gives you the knowledge you need to make smart decisions and grow your business.
According to SCORE, 40% of the small businesses polled said that bookkeeping and taxes are the worst part of owning a business. If you’re spending too much time on bookkeeping and accounting, it may be time to hire a monthly accountant. Professional help can help you get back to the enjoyable aspects of running your business. You may even find out that you aren't handling the financials as nearly as well as you thought you were.
Wondering if hiring a monthly accountant could be a smart move for your business? Check out this article, When is the Best Time to Hire an Accountant for a Small Business? There’s no single right time to hire a professional accountant - but if you’re considering the move, trust your gut. The sense that an accountant could help you is usually a very good indication that the time is right to make a move.
Whether you need to free up time to focus on the core areas of your business, or want professional advice to maximize your revenue potential, a monthly accountant is a smart investment with lasting benefits. Working with an expert means you can save time and money on current expenditures, operate your business in the most tax-advantageous way possible, and increase your business's current revenue potential. A monthly accountant provides the measurable impact and results you need to stay competitive and grow.
3. Not learning their bookkeeping/ accounting software or Point-of-Sale (POS) systems
Online accounting portals are a standard in today’s technology-driven business environment. The right online portal technology allows small businesses to conveniently and securely log in to their accounting firm’s website to access documents, tax returns, financial statements, and other important materials; upload files for their accountant; receive news and other messaging from the accounting firm; pay invoices; and even access online small business software.
However, merely purchasing this software isn’t enough. Not learning your bookkeeping and accounting software or your POS system can create a mess, increase accounting fees, and have costly tax implications.
The right accountant will provide the expert advice to help you maximize your online resources. Wondering what type of accounting might be right for your needs? Contact us today for a free consultation, and get the expert advice you need to grow your business.