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Do You Need an Accountant for Your Online Business?
When you run an Internet-based business, you’ll typically do much of your work online – including managing the required legal aspects of it. There’s no denying that the World Wide Web is a powerful tool for all business owners.
As an online business owner, one of your legal obligations is to ensure that your financial transactions get recorded correctly, as you’ll need to refer to them for your tax returns each year. You may have been using online spreadsheets or QuickBooks to help you with that.
But, could it be the right time to get ongoing help from an accountant? If any of the following points apply to you, the answer will likely be yes:
You Want to Transition to a Company
Arguably one of the top reasons why it makes sense to work with an accountant is when you want to transition your sole proprietorship business to a company. As you probably know, incorporation can be challenging and manage a company’s accounting records.
What’s more, there are a bunch of filing requirements once you’re incorporated, and you need to make sure that they get done correctly, or you could potentially face stiff financial penalties.
It’s no secret that cash flow is the lifeblood of your online business. You need money to pay for your business expenses such as stock, shipping fees, professional subscriptions, web hosting, and more.
If you need help with your cash flow forecasting, it’s worth working with an accountant. They can help you learn more about your income and spending habits, produce a 12-month forecast, and identify any areas of concern where you need to take swift action.
It might shock you to learn that you’re overpaying for certain expenses or that you can streamline some processes to get paid from your customers quicker.
You Want to Raise Funding for Your Business
Have you decided that you’d like to expand your online business operations? Perhaps you want to start selling additional products and services, or you want to branch out into other areas relevant to what you sell?
When it comes to online business expansion, you will typically need to raise additional funds to realize your goals. One way to do that is by borrowing money from a financial institution. But, before you can do that, you need to provide financial information about your business.
If you struggle to make sense of figures or don’t quite understand the questions a lender is asking, it’s a good idea to ask for help from an accountant. They can provide all the relevant information a lender needs in an easy-to-digest format.
Plus, accountants can also advise which funding types are best suited to your business needs. For example, you may find a small business loan has more favorable terms than an overdraft if you worry about potential cash flow problems.
Accountant for Online Business: Final Thoughts
Accountants work with entrepreneurs from all walks of life, and their clients range from sole proprietors to international corporations. Working with an accountant is often advantageous for small businesses like yours, especially from a tax efficiency perspective.