Accounting Services You Didn't Know You Needed
You might not think your business needs accounting services until you look at your books and see double entry everywhere. The good news is that there are accounting services geared to small businesses like yours that don’t require an accounting degree to understand. These services are often offered by accountants or bookkeeping service providers who specialize in the needs of small businesses. Here are six accounting services you didn’t know you needed:
Double-entry bookkeeping
Double-entry bookkeeping is the basis for all accounting systems. Essentially, double-entry means that for each transaction there are two sides — an expense (debit) and a revenue (credit). You can’t make sense of your financials without double-entry bookkeeping. It’s not uncommon for small businesses to do single-entry bookkeeping, particularly if they outsource their bookkeeping. If you choose to do single-entry, be sure you have a clear understanding of how it differs from double-entry. In fact, double-entry is so important that you can get audited for not doing it.
Tax preparation
You don’t have to be an accountant to prepare taxes for a small business, but make sure your tax preparer is familiar with the nuances of small business taxes. As a small business owner, you’re probably aware that most businesses are subject to the “pass-through” tax regime. While the IRS wants everyone to pay their fair share, they recognize that small businesses aren’t equipped to do the same kind of tax preparation as big corporations. In a pass-through tax regime, the owners of the business are taxed at the individual level based on how the business does in a given year. You’ll need to report your business earnings on your tax return and pay taxes on any profits as if you were an individual. This can be an accounting nightmare for small businesses if you don’t have the right person on your side.
Payroll services
Even though many small businesses don’t offer full-time benefits, there’s still a need to pay your employees a fair wage. You can use accounting services to set up your payroll, but you’ll need to be sure that whoever you hire is familiar with the intricacies of small business payroll and reporting. You’ll want to be sure your payroll provider is aware of any audits or compliance issues you’re facing. For example, if you’re in a state that enforces workers’ compensation laws, you’ll need to have workers’ comp coverage for your employees or face penalties. If you fail to report and pay workers’ compensation premiums, you can be assessed a penalty of 10% of the premiums you should have paid. Plus, you’ll have one more thing to worry about on your plate.
Company verification and audit services
You don’t have to be at the top of your industry or have a massive amount of revenue to get a company verified badge. However, if you want to show some customers and new prospects that you’re a legitimate business, verification is a good start. In some cases, verification can also help you avoid chargebacks and other problems related to fraud. The good news is that most accountants can help you get verified for free. However, if you have a company that’s already operating and you want to verify it, you’ll likely have to pay for verification services. A verification audit can help you get the information and documentation you need to prove your company is legitimate and trustworthy.
Business consulting
Many accountants offer business consulting as a value-added service. You may even be able to negotiate the terms of your accounting agreement to include some consulting with your bookkeeping or tax services. It can certainly help to have a partner in your business who’s familiar with the industry — particularly if you’re going after new markets or developing new products or services. There are many things that can put a small business at a disadvantage. Being unfamiliar with the industry and having a general lack of knowledge about the business can put you at a disadvantage. Having an accountant who can help you navigate industry trends and navigate regulatory issues can be a huge benefit to your business.
Financial analysis and forecasting
As your business grows and you develop a profit-and-loss statement, you’ll want to keep track of your costs and performance. Before you get too far into developing your P&L, you’ll want to confirm a few things — like the accuracy of your revenue and expense numbers. Your accountant can help you confirm that your books are accurate. When you have accurate books, you can use them to forecast future performance and identify areas where you can save money. Having accurate books gives you data points to track your progress against. You can measure how you’re doing against your business plan and your financial goals.
Conclusion
Accounting services can be an excellent investment if they help you keep your books in o
