For a new business, profit margin is everything. While it’s true that many new business don’t make a profit in their first couple years in business, it is possible to be successful. While opportunities abound today for entrepreneurs to turn their passion into a business, unless that passion is economics or business, it’s a good idea for new business owners to hire an accountant to keep track of the books.
First, it allows you to hire an expert at financials. Just like you want people to come to your business because you are an expert at judo, or dry cleaning or pizza making, your business should want someone who is an expert to help keep track of your profits and losses. Having an expert organize this will help you visualize where your money is going, and allow you to focus on improving your business in order to increase sales. Plus, you can focus on your passion, rather than worry about money issues.
Another great reason to hire an outside accountant is for legal reasons. If you’ve gotten into business with a partner, an outside accountant will help control arguments between you and your partner about financials. Also, having an outside person deal with the books makes it easier to do things like taxes as the year progresses, making you less of an IRS target in case anything goes wrong.
Finally, the efficiency of having someone else do your books frees up your time to think about everything else that goes into running a new business—marketing, website, your customers and more. In the long run, it’s money well spent toward making more money.