3 ways accounting can make or break your business

SAN FRANCISCO, CA Jan 25, 2016/ Troy Media/ – When it comes to business, accounting is a really big deal that can make or break your business. As an entrepreneur, an accountant is one of the first services you will want to acquire. You need a good numbers person who can see the patterns, spot the trends, and let you know when things are going off track with just a glance at the spreadsheet.

Of course there are other services you need. Some would argue that your first hire should be a lawyer, whose services you will need the moment you make a serious accounting error. But a good accountant can keep you from having to call a lawyer.

While marketing your products or services is also crucial, setting up the accounting is primary. Here’s why:

It is better to be audited by your accountant than by the IRS or Revenue Canada.

Whether you use a human accountant or [popup url=”https://www.chromeriver.com/” height=”600″ width=”600″ scrollbars=”0″]online expense report software[/popup] to help you keep track of things, the only certainty is that you would prefer an audit be done in-house rather than by a government agency combing through your records for errors.

Take special care with employee expense reports, where it is easy to lose track of things. Those inaccuracies can add up in ways that can do serious damage to your business.

According to Chrome River, a provider of accounting software:

Audit triggers and even intelligent samplings can arrive in the audit queue and will be flagged with a defined audit concern for the reviewers. Handy tools allow auditors to return items to the employees with pre-set narrative responses, additional notes and then maintain threaded discussions with the employees over the transactions in question.

A good accountant, or accounting software, can monitor and audit every phase of your business. Meticulous auditing from within protects you against auditing from without. If you do come under federal scrutiny, these types of tools will help you show that you did due diligence every step of the way.

Regulatory compliance

A good accountant can help you comply with government regulations. How long should you keep financial records? According to the [popup url=”https://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/How-long-should-I-keep-records” height=”600″ width=”600″ scrollbars=”0″]IRS[/popup] and Revenue Canada, that very much depends as to what those records pertain to. It could be from as little as three years, to indefinitely.

Document retention is tricky business. You can’t keep everything forever. Even if you could, it may not be a good idea to keep things any longer than you need them. Regulatory compliance makes just that aspect extremely difficult to get right. Now multiply that by all the other regulations regarding your finances. And it becomes rather obvious why you need an accountant.

Accurate accounting leads to better decisions

You can’t fly your business by the seat of your pants. It’s not an airplane. Of course, I wouldn’t suggest flying an airplane like that either. You need highly accurate data for precision analytics that can only come from an accountant who is great at what they does. The top schools in the country are including [popup url=”http://accounting.broad.msu.edu/welcome/ms-business-analytics/” height=”600″ width=”600″ scrollbars=”0″]business analytics[/popup] as a part of their accounting curricula because accountants are already well placed in the company to have access to all the data needed for critical decision making. Now, more than ever, accountants are specifically trained in what to do with that information.

If you want audits to have a positive implication for your business, if you want to be in regulatory compliance, and if you want to make decisions based on advanced analytics, you need an accountant.


The views, opinions and positions expressed by all Troy Media columnists and contributors are the author’s alone. They do not inherently or expressly reflect the views, opinions and/or positions of Troy Media.

Submit a Letter to the Editor

Troy Media Marketplace © 2016 – All Rights Reserved
Trusted editorial content provider to media outlets across Canada

You must be logged in to post a comment Login