Accounting is an important component of business operations, regardless of the size of the company. However, smaller businesses often face unique accounting challenges that larger businesses may not encounter. Below are some of the most common accounting challenges small businesses can face.
Payroll is a big job for businesses of all sizes. Every pay period, you must calculate wages and withholding accurately based on the number of hours worked. You must also make sure that your employees, the state government, and the federal government receive their payments on time. Payroll mistakes can be incredibly costly for your business, so it is important to ensure that this task is in good hands.
- Unexpected expenses.
Many small businesses operate with limited capital. When unexpected expenses arise, your business may not have enough money available to cover it. To avoid problems related to unexpected expenses, businesses should try to put away some money for emergencies. Small businesses should also have a contingency plan in place to cover any expenses they cannot afford, such as access to a line of credit.
- Cash flow problems.
All businesses need reliable cash flow in order to continue operating properly. However, many small businesses suffer from cash flow problems that can make it difficult to maintain smooth operations. To avoid cash flow problems, small businesses should manage their cash flow carefully by minimizing expenses, invoicing customers immediately, and being proactive about collections.
All businesses must pay taxes. Missing out on tax deductions and/or overestimating how much you owe can lead to over-payment, which harms your business’s profitability. On the other hand, taking deductions for which, you don’t qualify and/or underestimating what you owe can lead to an underpayment of taxes, which may result in IRS penalties. So, making sure that you are paying no more and no less than you need to pay is essential. Unfortunately, tax law is complicated, which is why so many small businesses struggle with this issue.
- Managing data.
In order to ensure accurate payroll, taxes, and business financial reports, businesses manage significant amounts of important data. For smaller businesses, this task can be daunting. Software exists to help your small business keep track of financial records, but you must still make sure that these records stay up-to-date and accurate, which is why software may not be enough!
Many of the accounting challenges faced by small businesses can be managed with the help of a CPA who specializes in small businesses, such as Goldin Group LLC. When you entrust your business’s accounting needs to us, you don’t have to worry about dealing with these challenges on your own.
Trust the Professionals at Goldin Group
At Goldin Group LLC, we understand that as a self-employed person or business owner, keeping up with accounting and taxes is time-consuming and can even be overwhelming. That’s where we can help! We work with individuals and businesses in Maryland (DC Metro Area), offering a variety of financial services designed to save you time and lower your tax burden. If you are a small business that is looking to outsource your accounting or if you need help managing any aspect of your business’s or nonprofit’s finances, we want to hear from you. Call us at (301) 913-0008 or email firstname.lastname@example.org to make an appointment.