Success Tips


Small Business Accountant – Why Your Company Needs One

Sep. 15, 2020

As a small business owner, the success of your business depends on how well you are able to keep a proper record of your business finance.

This can be done easily with the help of a small business accountant.

Every business generates income from either the goods they sell or the services they render.

These income or resources and the activities surrounding them ought to be properly recorded.

Who Are Accountants?

Accounting entails recording and summarizing business and financial transactions as well as analyzing, verifying, and reporting the results.

An accountant is saddled with performing accounting duties. He/she prevents and detects financial errors of a business to ensure financial order.

Accountants are professionals who record business transactions on behalf of an organization, reports company performance to management, and issues financial statements.

They perform auditing and maintenance of the financial records for businesses, individuals or organization as well as prepare periodic reports on financial matters, tax reports and analyses financial report.

An accountant is also responsible for preparing, keeping and interpreting financial records either for clients or for the business they work with.

Are Accountants Different From Bookkeepers?

small business accountants

Accounting is a very broad aspect of financial management and there are several areas attached to it.

This is why accountants can effectively carry out bookkeeping roles but a bookkeeper cannot perform most accounting roles.

Bookkeeping is a small part of accounting as an accountant can be considered a bookkeeper, but a bookkeeper cannot be an accountant without proper certification.

Accounting and bookkeeping both deal with financial data which requires basic accounting knowledge.

They also deal with classifying and generating reports using financial transactions.

After the bookkeeping function is carried out by maintaining complete records of all money that has come in and gone out of the business, the accountant analyzes the financial data.

When professional accounts offer bookkeeping services, they do not just help to classify reports and collate data; they interpret the information to help the business or client make better decisions.

Is a Small Business Accountant Different From a Regular Accountant?

A small business accountant is not different from a regular professional accountant. Any Certified Public Accountant (CPA) can oversee small business finance.

Nevertheless, it is important for a small business to hire an accountant who has experience in handling small businesses and can correctly guide them into making the best financial decision for their business growth.

What Do Accountants Do?

Business taxes in Alberta

There are multiple roles that accountants are trained to perform. Each of the roles can be carried out effectively by professional accountants and is required by all businesses.

1. Bookkeeping

Bookkeeping is the process of keeping records of the financial affairs of a business.

It concerns itself with the classification of financial transactions and events.

It is important to keep proper record of the financial activities of your business to help monitor cash flow.

This is one of the roles of an accountant.

2. Tax filings

Tax filing can be daunting and every business has to file their income tax as at when due.

In the first instance, filing your tax late might cause you to miss out on some benefits.

The due date for filing individual tax returns in Canada is June 1, 2020.

Hence, you will have until September 30th, 2020 to pay any 2019 income tax amounts owed.

Filing your tax late comes with a penalty.

You would have to pay 5% of any balance owing, plus 1% of the balance owing for each full month that the return is late, to a maximum of 12 months.

Hiring a small business accountant will help you get this done easily and faster.

3. Business development

Accountants help businesses to create and implement new financial ideas aimed at expanding a business.

Business development is usually a long term and continuous project in the sense that business increases profitability and expands each time after implementing a strategic business decision.

For a small business, it is essential to hire an accountant to aid rapid growth and business development which occurs as a result of accounting consultations from experts.

4. Issuing an invoices to a customer

An invoice is a commercial document that records a transaction between a buyer and a seller.

It helps you to find out how much your customers owe you or how much you owe a client and when the payment is due.

An invoice includes a list of goods purchased/sold or the services rendered as well as the total cost of the transaction.

It serves as a good way to keep record of your financial transactions as well as track your debtors and is given to the buyer by the seller.

5. Reconciling bank statements

At the end of every month, there is a need to reconcile your account.

This is done to ensure that the money leaving an account matches the actual money spent.

It is done by preparing a bank reconciliation statement to help the business prevent balance sheet errors and helps the business cut down on unnecessary expenses.

Reconciliation is a very difficult part of business financial management and should be done professionally by an accountant.

This is because it is important to pinpoint if there was any fraudulent transaction carried out.

6. Accounts receivable and payable

Accounts payable is the amount owed for the purchase of goods or services at a specific date while accounts receivable represent claims that are expected to be collected in cash.

An accountant helps you to keep track of your payments so as not to miss your deadline and at the same time help you monitor your debtors.

7. Payroll preparation and payroll taxes

Payroll refers to the employees you pay, the amount you pay as well as the employee information.

Accountants offer payroll services by overseeing the distribution of employee pay and ensuring that the right amount is paid and as at when due.

They also help to prepare and make payment of employee taxes.

Most payroll services calculate employee pay and taxes and send your payroll taxes and filings to the IRS.

Why Should I Hire An Accountant For My Small Business?

small business accountants canada

One of the main reasons why small business accountants are important asides from financial management is business development.

Even when you attempt to combine the role of overseeing the general activities of your business with financial and recordkeeping, you do not have the experience and training to make the best financial decision to boost business growth.

This is where an accountant is highly recommended.

Your accountant is in the best position to give you the right financial counsel for your business at every point in time.

Again, account reconciliation is a very technical aspect of financial management which ought to be done by an accountant.

This is because it can be costly to your business if your spending does not match the amount of leaving your account.

To file your tax yourself might not seem like so much work but you might deprive yourself from access to some tax returns that you are not aware of.

An accountant also lifts off all the financial burdens from your shoulders and helps you concentrate on the other major aspects of your business.

Uni-tasking is twice effective and productive than multitasking.

Simply put, every small business needs an accountant for;

  • Thorough Bookkeeping
  • Professional financial consultation
  • Early and effective tax filing/payment
  • Gives room to focus on other aspects of your business
  • To effectively monitor financial activities
  • Ensures early payment of employers

Should I Use A Small Business Accounting App Instead?

Small business accounting apps are very easily accessible and recommended for your business. Nevertheless, it has its downside.

Using a small business accounting app can help you get your financial and bookkeeping needs easily sorted out and very fast too but it is not 100 per cent reliable as there can be errors.

Lastly, unlike an actual accounting service, it cannot effectively give you a financial counsel that is best for your business situation as it doesn’t have in-depth information about your business.

If you are still considering the best accountant for your small business, it should be an easily accessible accounting service company with trained professionals who can attend to your exclusive need.

For Small businesses in Canada, Kaft CPA is the best result.

What Small Business Accounting Services Does KAFT CPA Offer?

Kaft CPA is one of the best accounting service providers in Canada.

They offer a wide variety of accounting services including bookkeeping, taxation, payroll services, business advisory, and bookkeeping.

Small business owners are a major target for Kaft CPA to enable entrepreneurs focus on other fundamental aspects of their business.

The goal is to get your tax sorted out with ease as well as other financial aspects of your business to give you an avenue to focus on promoting your business.

Put simply, KAFT CPA ensures your small business is financially secure.

Why is KAFT CPA Your Goto Small Business Accountant?

If your small business is in need of an affordable certified accountant, KAFT CPA is the best recommendation.

It combines both financial management and consultation to ensure rapid business development.

This means you get access to a wide range of services at a very affordable price.

We have the right experience required to guide you in taking the best financial steps at the early stages of your business to ensure you are well on your way to dominating your business niche.

Need an accountant who specializes in medical practices, oil and gas, small business and more?
Book your free 30-minute "Success Check" today.