Jan 30 Benefits Of Solid Accounting
It is commonly accepted as fact that effective accounting practices are vital to the long-term success of a business. For many smaller businesses or businesses just starting out, accounting practices can be the last thing they worry about. Certainly, none of these businesses would deny the importance of good accounting practices. If pressed for specifics, most of them would agree with the prevailing wisdom that spending more time, money and resources on accounting on the front end is a good investment that saves businesses money over the long haul. In theory, they understand investing in accounting; in practice, however, it is often a different story—especially for those aforementioned businesses that are smaller or just getting started. Simply put, some businesses do not feel they have the time to give an overhaul of their accounting practices the attention they feel it is due; as a result, they keep putting off solving the problem. As long as the problems of poor accounting remain an abstraction, the potential benefits will remain vague and undefined and leave a vicious cycle of wasted business potential. Perhaps the solution is to focus on the benefits of solid consistent accounting work as opposed to the drawbacks of accounting mishaps. After all, specific monetary benefits are hard for any business to pass up: even those who are in the exciting early stages of hiring employees and looking for office space. Here is a look at some tangible benefits of good business accounting.
There is more than one way to measure business efficiency, but no matter how you measure it, it will be made better through effective accounting practices. One of the reasons mentioned above that is a common factor in accounting failure is a perceived lack of time. What this really speaks to is a lack of efficiency with your time. This is an ironic reason for failing to implement better accounting practices because increasing the efficiency of the time a business owner and all of their employees spend is one of the chief benefits of accounting. An accountant who is abreast of the ever-changing IRS rules and regulations—paperwork, deadlines, formatting, etc.—can accomplish accounting-related tasks at a much quicker pace than anyone not devoted exclusively to this task would be able to. Whether that means hiring an internal accountant or speaking with a New Jersey accounting firm about their services, it can free up time that other specialists can devote to their specialties.
Perhaps the most black-and-white, tangible benefit of accounting is in the tax benefits that a smart accountant may be aware of. All of the reasons to employ a good accountant complement each other, and the tax-preparation knowledge of an accountant further bolsters the efficiency argument above. Good accountants will be able to advise a business on their most tax efficient strategies, possibly reducing tax liabilities by a significant amount—especially for small businesses who depend on operating as cost efficiently as possible. Aspects of taxation like dividends and VAT are ways an accountant can improve your financial bottom line. They also can help steer you away from tax penalties, providing a business with a form of addition by subtraction.
While accounting is often considered more of a supportive facet of a business as opposed to the primary engine, a good accountant will certainly be able to help grow a business. An experienced financial mind that is familiar with the specifics of your business is an invaluable resource for helping with decisions related to expansion and financing. With a mindset that appreciates the concrete value of accounting, you may begin to see myriad other ways an accountant can help your business going forward.