There are lots of wonderful aspects of owning and operating your own tennis club. But for many new business owners, accounting is not one of them. From setting up your bookkeeping systems to paying your freelancers and/or employees, a lot goes into managing your small business finances — and professional accounting services can help to make your life as a business owner a lot less complicated.
Below, the marketing experts at Tohme Accounting highlight three of the reasons why you should hire an accountant to manage your small business finances — especially as a first-time business owner.
1. Setting Up Bookkeeping Systems
Setting up your bookkeeping systems may sound easy enough, but unless you’re tech-savvy and have an accounting background, this type of task is best left to the professionals. With the services of an accounting professional, you can choose the right type of bookkeeping software for your specific business needs, and take other steps to properly manage and separate your personal and business finances.
As you get your small business off the ground, accountants can also help with the following types of tasks:
- Choosing a business entity, if you haven’t already done so
- Opening a business checking account
- Producing performance reports
- Making smarter financial decisions as a new business owner
2. Paying Employees and Contractors
In addition to setting up your small business bookkeeping systems, an accounting professional can help you to correctly classify and pay your workers — whether you’ve hired employees, contractors, or a combination of the two. If you incorrectly classify your workers, you could face tax fines and penalties at the state and federal levels.
After classifying your workers, you’ll need to set up a payroll system for your small business. Some employers pay their workers via check or reloadable payroll cards. Also, some employers use payroll direct deposit services to provide same-day direct deposit to their employees. These services are easy to use — simply plug in your employee’s hours and info, set up a processing schedule, and then run payroll.
As an employer, you’ll also need to withhold taxes from wages if you’ve hired one or more part- or- full-time employees. However, this is not the case for independent contractors or freelancers. These professionals are responsible for making quarterly tax payments to the state and IRS, as well as filing an annual tax return.
While an accountant can help you to understand your payroll and tax obligations as an employer, it’s important to have a general understanding of these requirements. If you hire one or more independent contractors, for instance, you’ll need to provide the IRS with a 1099 tax form for each worker earning more than $600 during the tax year in question.
Here are a few things to keep in mind when filing 1099 forms for your contractors:
- 1099-NEC forms are used to report non-employee compensation, such as the amounts you’ve paid your freelancers, gig workers, or independent contractors.
- 1099-MISC forms are needed to report miscellaneous income of more than $600, such as rent payments, prizes and awards, or payments to attorneys.
Fortunately, online 1099 filing features in payroll software can simplify the process of creating and e-filing these tax forms — regardless of whether or not you choose to work with an accounting professional.
3. Tracking Business Expenses
As a new business owner, an accountant can also help you to track your expenses and maximize your business deductions at tax time. You’ll need to keep detailed records and receipts of every business expense — such as equipment, club maintenance, advertising, software, salaries, and office supplies — but an experienced accounting professional can help you to create an expense tracking system that works best for you.
There are so many reasons to hire an accountant as you adjust to first-time business ownership, and the three highlighted above are just the start. Running a small business is hard work, but you’ll make it a whole lot easier if you outsource your finances to an experienced team of accounting professionals.
Tohme Accounting provides bookkeeping and other financial management services for businesses and organizations. To learn how we can help you and your business, please call (613)-869-0625 or email tohme.cpa@gmail.com.