Running a small or medium business in Australia is no small feat. While rewarding, it comes with many headaches and plenty of stress. Don’t let accounting be one of them!
While it might seem like you are saving money, handling all your financials yourself can lead to costly mistakes and take up so much time. Instead, you could hire an accountant and take a lot of worry off your plate.
In this article, we go over 13 compelling reasons your small or medium Australian business needs to hire an accountant. See if this strategic investment is the right move for you.
Table of Contents
1. Expertise in Australian tax laws
One of the primary reasons for hiring a tax accountant is their in-depth knowledge of Australia’s complex tax system. Tax laws are constantly evolving, and keeping up with these changes can be a full-time job in itself. An accountant stays on top of the latest regulations, ensuring your business remains compliant and takes advantage of all available tax deductions and credits.
Accountants can navigate the intricacies of the Goods and Services Tax (GST), income tax, and payroll tax, helping you avoid costly penalties for non-compliance. They can also advise you on tax-efficient business structures and strategies to minimise your tax liability while remaining legally compliant. This expertise alone can often save your business more than the cost of their services.
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2. Time savings and focus on core business
The benefits of hiring an accountant extend beyond financial expertise. By delegating your accounting tasks, you free up valuable time to focus on what you do best — running and growing your business. Instead of spending hours on bookkeeping and tax preparation, you can instead dedicate that time to strategic planning, customer relations, and product development.
The cost of hiring an accountant can be offset by increased productivity and profitability. Remember, your time as a business owner is valuable, and every hour spent on accounting is an hour not spent on revenue-generating activities.
3. Financial analysis and business insights
A skilled accountant does more than just crunch numbers. They provide valuable insights into your business’s financial health and performance. By analysing your financial data, an accountant can identify trends, spot potential issues before they become problems, and highlight areas for improvement.
These insights can inform critical business decisions, such as:
- When to expand or scale back operations
- Which products or services are most profitable
- How to improve cash flow
- Where to cut costs without sacrificing quality
This level of financial analysis can be a game-changer for small and medium businesses, providing a solid foundation for growth and success.
In terms of compliance, an accountant can also use this information to help you prepare your Business Activity Statement (BAS) and other relevant documents.
4. Improved cash flow management
Cash flow is crucial for any business. An accountant can help you develop strategies to improve your cash flow, such as:
- Implementing efficient invoicing systems
- Negotiating better terms with suppliers
- Identifying areas where you can reduce expenses
- Forecasting future cash flow needs
An accountant can help you avoid common pitfalls, such as overextending credit or running short on working capital, by monitoring your cash flow closely.
5. Strategic business planning
The importance of having an accountant is clear when it’s time to plan for the future. Accountants can assist in creating realistic budgets, setting financial goals, and developing long-term business strategies.
Their financial expertise allows them to:
- Project future revenue and expenses
- Analyse the financial feasibility of new projects or expansions
- Develop contingency plans for economic downturns
- Advise on financing options for growth
This strategic planning can help your business navigate challenges and capitalise on opportunities, setting you up for long-term success.
6. Support and representation during audits
Audit is a scary word for most business owners. Even if you are doing everything right, an audit notice from the Australian Taxation Office (ATO) can be unnerving. And with the confusing legal and taxation systems, it’s easy to miss something the first time.
In the case of an audit, having an accountant on your side can be invaluable. They can:
- Prepare and organise all necessary documentation
- Communicate with ATO officials on your behalf
- Explain complex financial matters in simple terms
- Negotiate settlements if needed
An accountant’s presence during an audit can significantly reduce stress and potentially save you money by ensuring all legitimate deductions are claimed and defended.
7. Access to financial technology and tools
Accountants use advanced financial software and tools to streamline processes and provide more accurate insights. By hiring an accountant, you gain access to these technologies without the need to invest in them yourself.
These tools can help with:
- Real-time financial reporting
- Automated bookkeeping
- Expense tracking
- Payroll management
- Data security and backup
Using these technologies can lead to more efficient financial management and better decision-making based on up-to-date information.
8. Assistance with business loans and financing
When it’s time to secure funding for your business, an accountant can be your greatest ally. They can help you:
- Prepare financial statements and projections required by lenders
- Identify the most suitable financing options for your needs
- Improve your business’s financial position to increase loan approval chances
- Negotiate terms with lenders
An accountant’s involvement can significantly enhance your credibility with financial institutions, potentially leading to better loan terms and higher approval rates.
9. Compliance with superannuation regulations
Navigating Australia’s superannuation system can be complex for employers. An accountant can ensure you’re meeting all your super obligations, including:
- Calculating correct superannuation contributions
- Making timely payments
- Staying compliant with changing regulations
- Advising on salary sacrifice arrangements
By managing your superannuation responsibilities effectively, you avoid penalties and maintain good relationships with your employees.
10. Guidance on business structure
Choosing the right business structure is crucial for tax efficiency and liability protection. An accountant can advise on the pros and cons of different business structures.
This is especially relevant when you are first setting up your business and when your business is growing rapidly. At the latter stage, restructuring may be necessary, and an accountant can help you navigate the process with ease.
11. Succession planning and exit strategies
While it may seem premature, planning for your eventual exit from the business is important. An accountant can help you in several ways. They can work on a succession or retirement plan.
They can also accurately value your business for better financial planning. And, when you are ready for a sale, they will support you in structuring the sale of your business for tax efficiency.
This forward-thinking approach ensures that you’re prepared for the future and can maximise the value of your business when it’s time to move on.
12. Networking and business connections
Accountants often have extensive networks within the business community. By hiring an accountant, you gain access to these connections, which can lead to:
- New business opportunities
- Introductions to potential partners or investors
- Referrals to other professional services (legal, insurance, etc.)
These networking benefits can be invaluable for growing your business and solving complex challenges.
13. Peace of mind
Perhaps one of the most significant benefits of hiring an accountant is the peace of mind it brings. Knowing that your finances are in capable hands allows you to literally sleep better at night.
Importantly, you can shift focus to your passions within the business rather than filling out tedious financial and legal documents. You can also reduce the stress of tax seasons, knowing that the process is in someone’s capable hands.
When you feel confident in your financial decision-making, your business prospers and so does your personal well-being.
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FAQ
What are the benefits of hiring an accountant for a small business?
Hiring an accountant for your small business can provide expert financial management, save you time, offer strategic insights, ensure tax compliance, and give you peace of mind. Accountants are not just number-crunchers but valuable partners in your business growth.
Can an accountant help me reduce my tax liability?
Quite often, the answer is yes. Accountants have a deeper insight into the various claims and tax benefits available for different types of businesses.
They can help you reduce your tax liability by identifying all eligible deductions, structuring your business efficiently, and planning your finances strategically. They also stay updated on tax laws to ensure you’re not paying more than necessary.
Why would you have an accountant?
You’d have an accountant to gain expert financial guidance, save time on complex financial tasks, ensure compliance with tax laws, get valuable business insights, and ultimately, focus on growing your business while having peace of mind about your finances.
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Final Thoughts
As your business grows, it can be difficult to properly manage all financial obligations, including payroll, taxes, and cash flow. Don’t let financial complexities hold your business back. From tax expertise and time savings to strategic planning and peace of mind, the benefits of hiring an accountant far outweigh the costs.
Ready to hire an accountant? Need advice on business tax compliance? Lawpath can help. Get in touch with us to learn more.
