As a small business owner, you most likely rely on the advice and guidance of your professional service providers to help you make the best choices for your business. For example, your lawyer does more than just draw up a contract, he or she should help you weigh your options and help you determine the best course of action that leads to creating the contract.
Your Raleigh small business accountant can act in a similar capacity. A trusted, experienced CPA can help you understand your financial health and make smart choices as you grow your business, becoming a trusted business advisor. In fact, 86 percent of business owners consider their accountant as someone they can turn to for business advice.
Let’s take a closer look at how your accountant can help your business succeed beyond simply doing your taxes!
Choosing a Business Entity
One of the first things you’ll do as a business owner is select your business entity, the way your business is structured for tax and liability purposes. The most common options are:
- Sole proprietorship
- Limited liability corporation
- S Corporation
If you’re not sure which option is best, you can meet with an accountant who will look closely at how you want to structure your business, then help you weigh your options and suggest which type may be best for your situation.
Explaining and Analyzing Financial Statements
Knowing and understanding your financial reports is essential to understanding the health and projected trajectory of your business. However, many small business owners think they only need financial statements for their initial business plan or when they want a line of credit to expand their business and often don’t take time to run this reporting. However, your financial statements show where your money is coming from, where it’s going, and where it is right now and can provide you with a cut-and-dried look at how your business is performing. The most common statements include:
The balance sheet shows your financial position as of a specific date, providing a clear snapshot of your net worth. It provides detail about your assets (cash, inventory, and equipment), liabilities (debt, invoices, wages) and equity (what’s left after subtracting liabilities from your assets).
Also called the profit & loss sheet, this shows your revenue and gains compared to your expenses and losses and provides you with a clear look at your business’s profit over a given amount of time. It can be used to analyze where you can leverage advantages, cut expenses, and create a budget
Cash Flow Statement
The cash flow statement shows your business’s incoming cash and outgoing cash over a specific period, showing if your business actually generated cash or lost it. It’s useful to see your busiest and slowest times of year and create forecasting and budgets.
Many small business owners don’t have the financial background to utilize these reports to improve your business. That’s where your accountant can look at these statements with you and provide you with clarity in your business’s performance. He or she can help you create a workable budget and set up financial forecasts, identify trends, and see the short term health and long term solvency of your business
Assist You with Your Small Business Payroll
Depending on how your business is structured and how many employees you have, your payroll may be a complicated, time-consuming operation. Your accountant can take that burden from you and oversee your payroll and payment processes. He or she will make sure that withholding taxes and paperwork is accurate and that your employees have their W2s at the end of the year. Plus, your accountant can also help you determine if hiring independent contractors is a better option for your business, how that employment and payment process differs from traditional employees, and how to file 1099s.
Contact Us for Small Business Accounting in Raleigh
At Steward, Ingram, & Cooper, PLLC, our team is dedicated to helping businesses succeed in anyway we can. Whether you need assistance with accounting and bookkeeping, financial statement preparation and analysis, or navigating taxes and compliance, we’re here to help. Contact us today at 919-872-0866 to schedule an appointment for a consultation.