Hiring an accountant may seem like an unnecessary expense, but accountants are more helpful than you may realize
. In fact, they can actually end up saving you money in the long term, which makes them well worth it.
Here are seven ways an accountant can save you money:
- They do your taxes.
- They help you find loans and deductions.
- They help improve your business plan.
- You’ll be able to benefit from their financial predictions.
- They can help you improve your investment strategy.
- You can learn how finances work from them.
- They help you save valuable time.
In the following sections, I’ll delve further into seven different ways hiring an accountant can help you save money. Therefore, if you’re considering expanding your finance department, this article is for you.
1. They Do Your Taxes
One of the most common reasons why people hire an accountant is to help them with taxes, and this is a smart fiscal move.
Sure, you can do your taxes yourself, but you have to learn how to do them and spend plenty of time actually making sure that they’re done right.
There are probably much more valuable ways to spend your time than wasting it trying to learn how to do your taxes.
Not only can an accountant do your taxes for you, but they will also make sure they do them right, saving you time and money later.
If you mess up something with your taxes, you will have to spend a lot of time and money to fix the issue.
It is easier if you just hire an accountant to do them right in the first place.
Furthermore, you can be penalized for incorrect or late tax returns.
If you mess up anything on your tax return, the IRS can fine you for the mistake.
Having to pay a large penalty is a risk you take by doing your taxes on your own.
Moreover, if you make a mistake on your taxes and have to pay a fine, you will end up spending even more time doing your taxes, leading to a vicious cycle. That time could go to much better use if you didn’t have to figure out your mistake, which you could have avoided by hiring an accountant.
2. They Help You Find Loans and Deductions
Another way accountants can save you money is by finding creative approaches to save and earn through financial assistance or tax deductions.
Sometimes businesses are entitled to funding if they are struggling or meet certain criteria, like those required for an environmentally-friendly business financial aid or a small business grant.
You can try to find these money-makers on your own or hire an accountant to do it for you since they already have the knowledge and tools to do so.
The cost of hiring an accountant will be far outweighed by the money they can save you, so the process ultimately ends up bringing you a net gain.
Furthermore, an accountant can help you find tax deductions, which could apply to any money you donate or other tax-free areas of your business expenses.
Therefore, if you hire an accountant, you can save money on your taxes by maximizing your deductions.
There are also some tax liabilities that you may have to deal with, and if you are not prepared for them, you may have to pay a lot of money once they come to light.
However, an accountant can predict how much you may have to pay in tax and other liabilities and prepare you to have the money already set aside.
Having your accountant optimize your probability of being awarded grants and tax deductions while preparing for any liabilities you might face is one of the best ways an accountant can save you money.
Without them, you will be ill-prepared to pay any money you owe, and you are likely missing out on multiple ways you can save some additional income.
3. They Help Improve Your Business Plan
This is a topic that only pertains to business owners; however, another way in which an accountant can save you money is by improving your business plan.
An accountant will be able to look at all of your finances, and they can help you determine where you are making the most money you possibly can and where you may be losing funds or not making enough to meet your financial goals.
Without an accountant, it may be difficult to take the time out of your day and busy schedule to check up on your business plan and see where you are making the most money, and therefore, need to focus more on.
Without the analysis of your business plan by an accountant, it will take much longer for you to improve and update your business plan.
The longer you go without a solid business plan, the more money you may be losing by not focusing on the right business operations.
An accountant will be able to analyze the following:
- Your cash flow
- Your revenue
- Any subsidiaries you have
- Where your expenses are
Then, you can go over the results of their analysis together to figure out where you might need to make some improvements to your business plan.
With an updated approach, you can save money by recognizing where your undertaking is doing well and where it is hurting and adjusting accordingly.
Saving money is crucial when it comes to your financial security, and if you want to learn more about why that is, check out our 13 reasons to start saving money.
4. You’ll Be Able To Benefit From Their Financial Predictions
In addition to helping you with your business plan, an accountant can help you forecast the future of your business.
Looking at how your business is expected to grow can help you determine where to invest your time and energy now, leading to larger profits in the future.
Accountants can help you make a financial forecast for your business and even take you through different model variations if you are considering a few outcomes or ways to improve your business.
Without an accountant to help you along the way, you may not be able to move your business in the right direction.
Likewise, you may be facing upcoming issues, expenses, or slow periods that you would not be expecting and could not prepare for otherwise.
Additionally, when it comes to finances, you may have clear goals in mind but aren’t quite sure where to start.
An accountant can help you set and meet realistic goals.
Alternatively, if you are trying to grow in a certain area of your business, they can look at it and determine whether or not it is possible and how you can work towards that growth.
Furthermore, there are different macroeconomic events that may affect your business, which you might not even be aware of.
Your accountant can also help you with these types of forecasts.
You can always do financial forecasting on your own, but it may not go as well, and it may take you a significant amount of time to create all the models, especially if you are not experienced enough. An accountant will have the tools and knowledge to make these models for you, saving you money and time in the process.
5. They Can Help You Improve Your Investment Strategy
Accountants can also save you and your business money by helping you with any investments you may have.
No matter if you’re looking to start, improve, or expand your investment portfolio, an accountant can guide you. The money that an accountant can help you save by not investing in risky or losing investments is well worth the cost of hiring them.
Having a well-curated investment portfolio is essential when it comes to ensuring the financial security of your business.
Your funds will passively grow, allowing you access to emergency resources should you ever need them.
Investments are a crucial part of growing your business.
As discussed in the section above, an accountant can help you forecast your business’ financial future, too, so they will know when you might need to tap into your invested money or when you’ll be able to leave the funds in longer-term investments.
Your accountant will also know how much money you have available to invest without putting in too much.
If you invest too much, you may lose money in the future either from risky decisions or from having all your money tied up in investments when you need it to fund your business operations.
Without your accountant to help you forecast and put some money into the best investments for your business, you can end up in hot financial waters in the near future.
Therefore, hiring an accountant, in this instance, will save you money since they can help you secure your financial future.
You can lose money in investing, so having an expert to help is important.
6. You Can Learn How Finances Work From Them
Another way your accountant can help save you money is by making your finances easier to understand. If you do not have all your financial information organized and in a way that is easy to analyze, you will have a tough time making budgets and understanding your finances.
Luckily, an accountant can take all your finances, organize them, and visualize them in a way that you understand.
If you have to do this on your own, you’ll be taking time away from other crucial operations, not to mention you may not have the necessary knowledge or resources to do this in the first place.
With an easy-to-understand and organized financial system, you can quickly see:
- Where you are spending your money
- How much you are earning
- How you can change your finances to improve your business
Without an accountant to help you along the way, you might be wasting money without even knowing it. Similarly, you might have some extra funds stashed away somewhere that are just depreciating without you benefiting off of them.
When your accountant gets your finances organized, you can easily analyze them to determine what is working well, what money is not being used as it should, and how you can alter your finances to earn more in the future.
Helping you make and maintain a budget is one of the most important ways an accountant can save you money. Learn why budgeting is important here.
7. They Help You Save Valuable Time
Finally, hiring an accountant will save you time. If you have a lot of financial information and transactions to process, or you know very little about taxes or the financial side of your business, hiring an accountant will save you time and frustration.
Instead of spending time each week and month looking at your finances, an accountant can look at them for you.
As they say, “time is money,” so the less time you spend on something you do not do well, like financial information, the more time you can spend running your business and doing the things you’re actually proficient at.
The accountant will take care of the operations you do not have the time or knowledge for, and the money you do pay them will be well worth it.
As discussed in the section above, an accountant can put your finances in an easy-to-understand format. So, instead of having to sort through them, analyze them, then determine what they mean for your business, an accountant can do that for you.
Therefore, unless you are an accountant yourself or employ a very simple financial model, hiring an accountant to do your taxes and handle your finances will save you time and money and keep you from paying more than you need to.
Now that you know all the ways an accountant can save you money, you may be wondering when you should hire an accountant. Should you wait until tax season? Should you find one right now? Learn when to hire an accountant here.