Skip to main content

Your accountant can do more than manage your small business’s books and file your tax returns. When you hire the right accountant, they use their talents and technology to help you manage your cash flow and achieve your goals, whatever they may be.

Large organizations typically have a full team of accounting and finance professionals managing their numbers, but the same cannot always be said for small businesses. If you only think of your accountant when it’s time to prepare your annual tax return, you could be missing out on the benefits of several other valuable services that a good accountant can provide.

Here are five ways a small business accounting professional could benefit your business.

1. Payroll management

Managing payroll is more than just tracking employee hours, calculating salaries, and issuing paychecks. You must navigate various federal, state, and local laws and file tax returns. Rates and withholding forms may change frequently. For example, in recent years many states have raised their minimum wage rates above the federal minimum wage, and Congress has created several payroll tax relief programs to help employers offset the cost of maintaining the staff during the COVID-19 pandemic.

When you outsource your payroll, you won’t have to worry about understanding and implementing new reporting requirements or wage and hour laws. Your payroll department can monitor the latest regulations and determine their impact on your business. With a team of payroll experts on your side, you can avoid costly payroll errors and associated penalties. Plus, your professional accountant will have access to complete and accurate payroll data that they can use to file returns or provide proactive advice.

2. Find and claim valuable tax credits

Tax credits are incentives that companies and business owners use to reduce their tax liability. These can be more valuable than tax deductions because while deductions reduce taxable income, tax credits are a dollar-for-dollar reduction in tax owed.

Do you know all the tax credits that you and your business can claim? Unfortunately, few small business owners are, and millions of dollars in tax credits go unclaimed each year.

For example, the U.S. Chamber of Commerce reports that fewer than three in 10 companies that qualify for research and development (R&D) credit claim it each year. Often it’s because small business owners think they don’t qualify. However, the R&D credit applies to a wide range of businesses, including those involved in software, manufacturing, architecture, engineering, and construction.

Other tax credits an accounting professional could help your business explore include:

3. Turn data into actionable insights

You may not realize it, but your business is sitting on a gold mine of data: accounting and inventory numbers, employee timesheets, marketing results, what your customers buy and when they buy it. So how do you use this data?

Many accountants are now leveraging data analytics tools and dashboards to uncover valuable insights into their clients’ numbers. They can help you use this information to:

  • Better manage cash
  • Identify process improvements to increase efficiency
  • Find patterns of behavior in your customer base or in the market
  • Helping you decide when to hire, expand into a new market, or take on debt

In recent years, hiring has been difficult for many small businesses. If your accountant partners with ADP, they have access to exclusive resources to learn what people are paying for jobs in your area and can help you decide on a compensation package that will help you attract and retain them. talents.

4. Identify funding opportunities

Paycheck Protection Program (PPP) loans have been a financial lifeline for small businesses during the pandemic, but getting one hasn’t been easy. Business owners had to complete a complicated application, calculate their loan amount and provide copies of tax returns, invoices, bank statements and other documents. Not surprisingly, accountants have been called in to help small businesses navigate this process.

Of course, a global health crisis is not the only situation in which companies need access to financing. An accountant who understands your business and industry can help you determine the current value of the organization, as well as identify the level of financing you may need, evaluate financing options, and gather documentation that the lender or investor might need to approve your application.

5. Benchmarking against other companies

How is your small business doing? Do you charge enough for your products or services, offer employees competitive salaries and benefits, and manage expenses well? It’s hard to know the answers to these questions unless you have something to compare your numbers to.

Benchmarking your performance against other organizations helps you see how your pricing, productivity, and competitiveness measure up to industry standards so you can set realistic goals. Instead of just guessing your KPIs, you can look at industry standards. Your accountant can help you identify financial and non-financial metrics to track and decide what actions you need to take to improve your metrics.

Your accountant can do more than manage your small business’s books and file your tax returns. If your accountant uses ADP Accountant Connect SMthey will have access to an extensive library of resources to add value to your business, including compensation benchmarking, cash flow management, HR compliance, customer insights, employee reports, and more. industry and company ratings.

When you hire the right accountant, they use their talents and technology to help you achieve your goals, whatever they may be.

Tags: Compensation & Benefits Payroll Administration Risk & Compliance Benchmarking Outsourcing Payroll Processing Tax & Payroll Reporting Tax Compliance Tax Credit Midsize Business Small Business Articles Payroll business owners small business payroll tax