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When embarking on the adventure that is a new business, it can be tempting to try and take everything on yourself. It may seem like you are saving a few pennies, but in reality, the price of not outsourcing your financial management to experts can be much higher. Here’s why you should leave money management to the professionals.
New businesses require a lot of attention. Establishing yourself in the community and online, building relationships with your clients, nailing down production and pricing of goods and services, and taking care of the countless other demands of a new business will have you working round the clock.
Part of being a successful entrepreneur is knowing how and when to delegate. Mind Tools notes that you should delegate to someone who has the time, resources, and knowledge to complete the task. If you don’t have a background in accounting or payroll, taking on these tasks yourself will add more to your plate than just the extra time spent to complete them. You’ll also have to spend time studying requirements for deducting child support, composing reports for investors, and more. That’s extra time that could be spent working on other aspects of the business.
If you mismanage your business’s finances, especially when it comes to taxes and payroll, this will not only cause undue stress, but it can also cost you in penalties. Not paying your taxes on time can result in a 5% penalty for every month you’re behind, and you can count on significant penalties if you fail to pay them. It’s true that if preparation doesn’t go according to plan that you could apply for a tax-filing extension; however, this shouldn’t be a regular occurrence.
Hiring an accountant doesn’t just ensure you will have accurate records and profit and loss reports to share with your investors. You also benefit from their understanding of data, which can help you make better-informed decisions for your business. By putting your financials in the hands of a professional, you ensure you get the most from your money.
Using a payroll service to handle your payroll has similar benefits. Payroll, like accounting, has many specific protocols, including taxes and deductions, that if managed incorrectly can result in serious consequences. And incorrect or late payments can leave employees dissatisfied. Buddy Punch notes that paying your employees on time shows them that you appreciate their contribution. Dissatisfied employees are more likely to quit, which could hurt your business.
If you’d rather keep payroll in house, using comprehensive payroll software will be a boon. With an online payroll provider like QuickBooks, not only can you stay organized, but you can also automate payroll, your taxes will automatically be calculated and filed, and you can even manage human resources and employee benefits like 401(k) plans or health insurance.
Business taxes are a complicated beast. If you don’t know what you’re doing, it is easy to make a mistake that either costs you money or loses you deductions you might have benefitted from. With a business, there are several aspects of taxes an individual might avoid: expense tracking, paying estimated taxes throughout the year, deductions specific to your business and more. It also can be difficult for a business owner to correctly keep track of individual versus business tax information. Because of this, it’s important to hire a professional who can handle your taxes without making any mistakes.
Take the pressure off of yourself and hire professionals to handle the money end of your business. By doing so, you will sleep better knowing you have people you can trust who will give your business the best chance at success.
If your business is in a high-risk industry, First Financial is here to help you secure the merchant services you need so that you can accept credit, debit and gift cards. For more information, contact us today!
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