The Importance of Accounting for Business Owners
Career Path : Accounting
Every individual aspiring entrepreneur will adopt a unique business model in order to suit their needs. While business models may vary, accounting and bookkeeping is an essential part of each growing or established business. Basic training in accounting will prove to be a very useful investment for budding entrepreneurs. Consulting an external accounting firm can be very costly, so basic accounting skills will alleviate the costs of outsourcing this important function.
Self-Training vs External Consulting
One of the first decisions business owners must make is how to handle their bookkeeping. Many opt to hire seasoned professionals in order to avoid potential tax issues. Hiring a professional accountant will almost guarantee the integrity of your bookkeeping. Penalties and fees associated with faulty accounting is an expensive and unnecessary business expenditure. The Canada Revenue Agency (CRA) should not be underestimated, as they will trace every dollar your business is making and penalize accordingly if taxes are not paid. Nobody can avoid taxes. High-profile actors like Wesley Snipes have been incarcerated due to tax negligence.
Businesses are just as liable as individuals. Property seizures and wage garnishing are common practices of the CRA. Many common accounting mistakes are not a result of deceptive business or fraud. Instead, naivety and ignorance of law is a common reason businesses faces tax penalties. Experienced accountants will ensure proper bookkeeping and avoid unnecessary penalties. If one opts to keep track of finances independently, it is strongly recommended to take a reputable class in accounting. Accounting courses are available in several community colleges for a very reasonable cost. Accounting courses will properly train you on the intricacies and logistics of bookkeeping. Additionally, the long term benefits of taking classes in accounting include the savings from hiring accountants.
Technology has improved dramatically since the introduction of the personal computer. Several accounting programs are available on the market. These programs automate the accounting process and makes bookkeeping stress-free and low-cost. Most times, accounting software is significantly cheaper than taking a class in accounting or hiring an accountant. Before spending money on accounting software, it is important to make sure the program is both easy to use and accurate. Simple accounting mistakes are costly and it is important that ensure the integrity of your business’s bookkeeping.
In conclusion, it is very important to make sure that the accounting records are perfect. While LLCs and corporations prevent individuals from being personally liable, sole proprietorships and partnerships do not offer the same benefits. Owners of sole proprietorships are financially liable for any mistakes made by the business. Because of this, it is especially important to maintain perfect accounting records. Mistakes and discrepancies can result in financial ruin and legal troubles.
Visit National Academy of Health and Business for more information about accounting courses.