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Why Every New Business Needs Professional Accounting Expertise

July 17, 2018

While small businesses account for over 97% of the Canadian economy, only 35% of these ventures make it past the 5-year mark. According to recent surveys, poor cash flow management is often the biggest barrier to business success.

While every entrepreneur knows that profitability is the key to their long-term growth, most lack the financial expertise to make good on this objective. But accounting firms do.

If you’re a Canadian business owner struggling to manage the responsibilities of bookkeeping, tax compliance, payroll then our chartered accountant in Mississauga can help.

Accurate Data and Reporting

Unfortunately, passion isn’t enough to keep your business afloat. You also need the right information to drive your decision-making. Before investing in new assets or premises, you need to know that your income can support the minimum payments on your lease. Before negotiating a lengthy credit period with a new client, you need to know that your working capital can carry you until the invoices are paid. A qualified CPA can answer these questions and many more.

Chartered Accountants will perform ongoing analyses of your cash flows, overheads, inventory, and liabilities to provide an accurate assessment of where your business stands today. This will help to ensure that your business remains financially stable as it grows.

Access to Financing

If you’re looking to expand your operations then you’ll need more funding. The obvious way to do this is through a small business loan. But getting a loan application over the line is easier said than done. You will need to present a comprehensive business plan that presents your business as a viable investment for the bank. You may also need to restructure your ownership and existing debts in order to meet the minimum criteria for eligibility.

A CPA can provide invaluable insights during this time. Not only will they help you organize and prepare necessary documentation and coordinate any necessary restructuring, but they can also advise you on the best loan products available based on your current profile.

Tax Compliance

Tax season is normally a time for widespread panic amongst small business owners. Not only do you have to deal with the task of reporting expenses, write-offs, salaries, and profits, you also have to deal with a complex, constantly-evolving tax code while doing so.

For many entrepreneurs these challenges result in late or incomplete filings that open them up to penalties, fines, or in worse case scenarios CRA audits. Accounting firms can help you stay on top of regulatory and compliance issues, and ensure timely, accurate tax filings at all times.

Apart from these advantages, your accountant can also help you minimize your tax burden by identifying investment and savings opportunities that can save more of your profits for reinvestment in the business.

Focus on Your Core Competencies

As an entrepreneur, your main focus should be on growing your customer base and improving products and services. But if you’re spending a large portion of time managing books and calculating payroll, then you won’t be able to focus on these strategic initiatives.

Alongside reporting and tax assistance, accounting firms provide bookkeeping services that take these routine tasks off of your shoulders. With professionals recording your sales and purchases, updating the general ledgers, recording transactions in your inventory management system, performing monthly bank reconciliations, posting your monthly invoices and recording or calculating your payroll; you have the confidence that your underlying business financials are always in good order. Now, you can work to take your business to the next level.