In Pursuit of Profit
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One mistake that unites all small business owners is trying to do too much in-house. Small business owners are naturally cost-averse, which makes them less likely to outsource financial needs when they arise. They are far more likely to bumble through the numbers related to essential projects themselves or consult a bookkeeper for ad hoc assistance rather than hire a specialized accountant to do the job.
However, specialized accountants are integral to completing certain types of projects. Unlike a bookkeeper or general financial professional, a specialized accountant is already familiar with a specific industry, project, or business type. Being able to skip the time required to educate a generalist justifies the higher fees that specialized accountants charge.
Throughout the duration of the engagement, working with a specialist will likely be more efficient as well. Reducing the amount of back and forth communication needed to provide relevant information, discuss details, and clarify goals results in significant time savings. Furthermore, specialized accountants typically produce better results – reducing errors and delivering financials faster to enable time-sensitive decision-making.
While some business owners assume that specialized accountants are only needed for complex operations like securing government contracts or franchising a business model, many common projects benefit from the expertise that a specialist can provide also.
These recurring and ongoing projects necessitate a specialized accountant as well:
1) Filing Taxes
A tax accountant or CPA (Certified Public Accountant) can assist with filing annual state and federal returns to reduce a company’s tax burden. These tax law experts stay current with changing regulations to provide clients with timely tax options and recommendations. Additionally, they can advise on the overall financial direction of the business to maximize value to their clients.
2) Identifying Errors and Fraud
Forensic accountants are brought in to detect financial discrepancies as a result of errors, omissions, and fraud. In litigated cases of fraud, forensic accountants can serve as expert witnesses in court to present their findings as supporting evidence, making them essential for prosecuting fraudulent activities.
Using GAAP standards, a forensic accountant verifies financial records to ensure reporting accuracy. In instances where original records have been lost due to fraud or destruction, they can also reconstruct financial information to provide historical data. In instances where accounting systems or processes have changed (like in the case of moving from cash-basis to accrual accounting), forensic accountants can guarantee that all financial information was migrated properly.
A forensic accountant can also uncover waste and recommend ways to avoid losing revenue due to business inefficiencies and mismanaged capacity.
3) Auditing Records
Voluntary and obligatory audits for compliance and due diligence purposes can be completed by a specialized auditor. Auditing financial records is a task that requires an expert to ensure that best practices are followed, and impartiality is achieved. Audits should be conducted regularly to identify problems before they become bigger issues. Hiring an outside auditor is a crucial step in establishing financial control systems to prevent fraud.
A non-profit organization’s board of directors will require that financials be thoroughly reviewed to ensure that funds are being used wisely to further their mission. Non-profits should utilize an auditor that has proven experience with NPOs because the accounting processes are different between for-profit and not-for-profit businesses.
4) Improving Business Processes
A cost accountant can analyze operations to reduce costs, increase efficiency, scale up capacity, or achieve other business goals. Depending on the scale of the business goal, a project accountant may be useful as well. For limited-time engagements and ad hoc needs, project accountants can advise on how to best accomplish individual projects and other short-term activities.
Cost accountants are also adept at analyzing manufacturing costs and other inputs to establish a future business direction. Setting financial goals and establishing KPIs (key performance indicators) is a key area in which a specialized accountant can demonstrate their value. These functions can be beneficial both during a downturn, when cost cutting is necessary, as well as during times of growth, to maximize business opportunities.
5) Making Investments
Business owners looking to diversify their personal portfolios or invest business funds should consult with an investment accountant. These specialized accountants can advise on stocks and bonds as well as more complicated investment types. Furthermore, they can integrate financial investments into the company’s overall financial strategy while keeping tax implications in mind with investment income. Ongoing work with an investment accountant can yield business gains that would not be possible without the help of an experienced professional.
A staff accountant can assist with ongoing payroll as well as other day-to-day functions like cash management and bank reconciliations. This type of accountant is the closest thing to the bookkeeper-type relationship that many business owners are accustomed to utilizing. Staff accountants can be brought in during large hiring pushes or simply to handle the burden of ongoing employee-related finances.
Regardless of the project, certain industries and business types also require specialized accountants due to the unique demands of their business models. For instance, health professionals and medical practices, restaurants and hospitality-related businesses, construction companies, and franchisees have distinct financial needs that necessitate a specialized accountant.
If you have special projects that are important but interfere with day-to-day business, please call. Our team of accountants have decades of experience and can work in an interim role or part time.