Scenarios In Which A Sole Proprietorship Needs A Commercial Accountant
Posted on: 23 April 2021
On the face of it, running a small business — especially a sole proprietorship — can seem like an easy undertaking. However, nothing could be further from the truth because people start businesses with growth in mind. Therefore, hiring a commercial accountant is critical to ensuring the success of your business. Notably, some sole proprietors have a background in basic accounting, while others use simple accounting software to ease bookkeeping. However, even if you understand a little bit of accounting or use accounting programs, some circumstances call for a commercial accountant. This article highlights scenarios when a sole proprietorship should hire a commercial accountant.
Tax Season — Businesses, no matter how small, should pay taxes as long as they are operational. Unlike individual tax preparation, business tax can be pretty complex, even for small businesses. Therefore, rather than rely on the basic accounting skills you have, it is a good idea to bring in an expert. A commercial accountant understands business taxation laws intricately and will ensure that your firm reports the correct figures in a timely fashion. Additionally, a commercial accountant understands that every dollar counts for small businesses. Therefore, the accountant will help identify all possible claims during a financial year. Therefore, if you want to prepare your taxes on time and save money, hire a commercial accountant.
Incorporate Changes in Accounting Laws and Regulations — Typically, businesses have to follow the rules and regulations set by the Australian Accounting Standards Board when preparing accounting reports. However, governments and accounting bodies are always working together to make reporting easy and close potential loopholes that businesses might use to their advantage. It might explain why accounting regulations and tax rules change constantly. For instance, the AASB released new accounting standards in 2020 — the AASB 2020-2 Amendments to Australian Accounting Standards and AASB 1060 General Purpose Financial Statements. A lay business owner would not understand how the new standards affect their operations, which is where a commercial accountant comes in. Their role is to make sense of new accounting standards and streamline financial reports to reflect the changes.
Loan Application — Finding and securing funding to grow your business can be overwhelming. You have to convince investors and financial institutions that your business is doing well to warrant a loan. However, individual investors and banks care little about stories and more about numbers. If your books can convince investors that your business has been growing gradually and will continue to do so in the distant future, the chances are high that you will get funding for expansion. A commercial accountant is well equipped for such scenarios, and they will organise your books so that investors can peruse them quickly and make decisions.
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