No matter how passionate you are about your business, or how much you do it for altruistic reasons, at the end of the day you must turn a profit. Without reliable cash flow, you simply don’t have a viable business. It’s more than making money, however. Even a profitable business will go bankrupt if the money is not properly managed.
Managing the money is a huge part of any business; so, what is best? Managing the finances on your own, hiring a bookkeeper, or hiring an accountant?
On Your Own
When you manage your business’ financial affairs on your own, you have complete control over every aspect of the dollars and cents. You decide what to spend on supplies and inventory, how to cut costs, how to increase revenue, etc. The major con is, this takes a lot of time and requires some expertise.
Without specialized training, you are limited in how much of the books you can manage as the business grows. Recognize when it’s time to get help.
A bookkeeper saves you hours of time each week by taking care of day-to-day tasks such as creating and sending invoices, doing payroll, recording financial transactions, and chasing down outstanding accounts.
This role should be filled with someone that has current training and experience. Depending on the size of your company, this role could be filled by a contractor, a full or part-time employee, or an administrative assistant that also does other office tasks.
An accountant helps to guide your company’s financial decisions and has a very active role in analyzing the costs and expenses of your operations. The accountant is the one that prepares your tax returns and works with Canada Revenue Agency on your behalf. He or she does the financial statements, strategic planning and forecasting.
Small businesses often contract this position. Larger businesses have an accountant or accounting team in-house.
It’s a Team Effort
It’s very important for you to be actively engaged in the money management no matter what size your company is, but you should also rely on the experts whose career is in bookkeeping and/or accounting. Their knowledge and expertise are a smart investment in your own time, peace of mind, profit, and smooth company operations.
You need to start the process and remain engaged in it, you need a bookkeeper as you grow to handle the daily finanical side of your business, and you need an accountant to help with the taxes and higher-level financials.
AF Accounting is Your Solution
AF Accounting is more than an accounting firm. We specialize in helping small businesses grow by providing a variety of customizable services. Whether you are just starting out, you are a solo entrepreneur, or if your business is thriving and growing fast, we have solutions for you.
Tax advice and tax planning; cashflow, budgeting, and forecasting; virtual CFO; year end management – contact us today for