The answer is “no”– if the only purpose of accounting your business is to prepare returns for various government departments. Let’s face it, most of the small business managers/owners procure accounting services only under the pressure of notices received from the government. They will never seek these services if the government did not require them to file any returns. Actually, no government insists that businesses have their returns prepared by accountants—by that we mean licensed accountants. However it is widely known that the returns prepared by accountants have more credibility and are hence less vulnerable to audits.
Some managers especially those who started managing recently, believe that an accountant will be useful only when their business starts generating large income thereby implying that accountants are needed when taxes are to be reduced. The fact is that taxes are just another expense that must be minimized. An accountant can help you reduce all expenses including taxes.
Fact remains, filing taxes and minimizing expenses are just two of a host of management responsibilities regarding which an accountant can be a big help. In order to find a more complete answer, let’s start from the most fundamental fact. The purpose of any business is to make profit and the amount of profit is determined by how well it is managed. It is the accounting of business that the management depends mostly on to make its decisions.
Now we can better answer the question, why do you need the accounting of your business? It is simply to help you manage your business better. It is to help you increase the revenues and decrease the costs of your business. It is to help you improve the cash flow. It is to help you develop a budget and stay on course. It is to help you develop effective marketing, operations and financial plans. It is to help you identify and remove the road blocks from the tracks of profit enhancement. It is to help you all the time, and not once a year just to prepare the financial statements and tax returns.
You do not need just an accountant, you need one of the most qualified to help you in all above stated and many other matters. The management of a business begins long before it is operational. No business is too small to require management. Additional services would cost you extra, but the benefits would far outweigh. Small business managers who really believe in accounting, soon find themselves managing a business that is not small any more.