If you're using cloud accounting software, you may be considering breaking up with your accountant. After all, software can do so much today, much of it automated, so why pay for someone when you're already organized?
It's true, financial software can save you time and keep you organized day-to-day. But I believe you absolutely still need your accountant. Here's why.
5 Reasons Not to Fire Your Accountant
- Automated software can only take you so far. Your business is unique -- when it comes to finding maximum deductions or handling complicated questions about your transactions, for example, there is no one-size-fits-all answer. A professional will apply solutions that fit your business to a tee, something technology just can't do.
- You don't know what you don't know. Any system is as good as the information you enter into it, but if you don't understand latest tax codes, for example, you won't know what dark alleys to peer down to minimize pitfalls or maximize profits. Your accountant will know the best approach, and ask the right questions to put more money in your pocket.
- There's reason to believe that having an accountant prepare your tax return could reduce your chances of being audited. In certain scenarios, "red flags" in your accounting could lead to an audit, such as expensing an asset in your current year's return instead of amortizing it over a number of years. Unofficially and anecdotally, word on the street is that the red flags are often lowered if someone with solid accounting credentials has prepared your final paperwork.
- The worst use of your accountant's time is organizing your finances into neat columns, and sorting through your receipts and transactions. Software can do that for way less money than what an accountant would charge. That's why we built Wave. The best use of your accountant's time is for you to tell her or him what your plans are, and ask them to guide you. Should you incorporate your business? Do you want to expand? Bring on a partner? Take out a loan? Your accountant can help you make sound financial business decisions.
- Good business is more than plus and minus. You may be nicely profitable, but a great accountant will look at your income and expenses to find even more ways of putting money in your pocket. For example, they can draw on real-world experience to see where you might be overspending compared to others in your industry.
The most effective method for your small business accounting is to use a combination of financial software and hire a professional. The right software will be intuitive and integrated to help you manage all your financial needs. When you marry that with the advice of a pro, you'll save money, get great advice, secure your future, and sleep soundly at night. You'll also have more time to focus on the parts of your business you're passionate about. And isn't that the reason you went into business in the first place?