Considering the number of challenges that incorporated consultants in Canada face on a daily basis, the value of working with a dedicated professional accountant cannot be understated.
Does an accountant cost money? Of course, and it’s one of the biggest reasons preventing consultants from seeking the services of a professional accountant. But their services should be considered an investment, not an expense.
An accountant’s scope of work does not end with tax preparation; they can and should be a year-round business partner that can lend expertise and perspective in your industry to help your business grow and navigate through an uncertain economy.
Here are seven reasons why all incorporated consultants should work with an accountant.
1. A Professional Reputation
A good accountant will represent you and your consulting business in the best possible way. This is particularly important as consultants strive to build strong relationships with key players in their success, such as the bank.
2. A New Perspective
Often incorporated consultants are so involved running the day-to-day operations of their business that they may not be able to see the whole picture. Someone who is removed from the business can provide a different perspective that may otherwise be missed. Meeting with an accountant can be like taking a step back, examining the bigger picture and gaining a fresh perspective. Somtimes that's all it takes to come up with the next big idea.
3. They Have Reach
Don't underestimate how valuable it is to receive guidance from someone who has insight and knowledge across hundreds of businesses and industries. Accountants not only get to see the financial information of many businesses across a variety of industries, but they also have visibility into best practices that are working for other businesses as well as the mistakes others have made that have led to failure. Being able to have the insight and share information on what has or hasn't worked for others is invaluable.
4. Businesses Need a Plan
One reason hundreds of incorporated consultants in Canada fail every year is because they didn't have a plan. When asked why, many respond, "I just didn't know where to start." This is where an accountant comes in. A good accountant will partner with a business to look at all the data and help build a road map to success.
5. They Understand Tax
This may seem obvious, but keep in mind that CRA rules and regulations change frequently, and it's tough if not impossible for any business owner to keep up with it all. Twenty-nine percent of Canadian small business owners admitted that accounting and bookkeeping is one of their biggest challenges. An accounting professional can take away your uncertainty and ensure your business stays compliant.
6. Analyze Data for Growth and Profitability Opportunities
If all of your data is just sitting in a database and you're not interpreting, analyzing or using it to help drive your business direction and decisions, you're missing out on a great opportunity. Have an accountant help you dive into the numbers and use them to propel greater business growth and profitability in the future.
7. Establishing a Smart Budget
An important accounting function for incorporated consultants in Canada is the creation of a budget. Budgets outline the expenditures needed for various aspects of the business. Consultants may budget for capital for hiring employees, advertising strategies, inventoried purchases and other types of business expenditures. Sticking to a budget helps consultants avoid wasting capital on non-essential business items. Budgets can also create a historical record of how the business spent capital for producing services.
Can an incorporated consultant in Canada survive without the assistance of an outside accountant? Possibly, but the extra insight, guidance, and expertise an accountant offers can be the catalyst that makes your business thrive.
If you are an incorporated consultant or small business owner in Canada, be sure to speak to your accountant about the tax advantages associated with the Olympia Benefits Health Spending Account. Download The Beginner's Guide to Health Spending Accounts to learn more.
Or are you an Accountant? Discover Olympia's Health Spending Account guide specifically created for accountants and learn how to maximize your client's position with this effective tax planning tool.