When you start off as a team of one, handling every job to keep your business moving on your own is tough. Most owners dream of the day they can afford to bring on another set of arms and legs.
Hiring an employee is also a big step towards scaling your business and planning for growth. But, when you make the shift from a solopreneur to an employer, the game changes. Suddenly, owners find themselves delegating the day-to-day tasks of running their business in exchange for the internal tasks of managing the business. In the case of hiring, one of those tasks is payroll.
After setting financial goals and a budget for your small business, it's crucial to monitor how well your company is performing. Is it on track to achieving its revenue and profitability goals? Is it controlling its costs?
Even if you’ve contracted the help of an accountant, it’s helpful to develop your understanding of your business’s financial affairs. One way to accomplish that is to become familiar with and regularly review the following reports.
● Profit and Loss Statement
● Balance Sheet
● Cash Flow Statement
When you’ve made the transition from someone else’s employee to being your own boss, you gain the autonomy to create your own professional path. You get additional responsibilities, as well—including paying self-employment tax.
Self-employed individuals are required to not only directly submit the income tax they owe to the federal, state, and local governments, they must also remit self-employment tax to the IRS.
Finding the right accountant for your small business is an important decision that deserves careful consideration. Here’s how to find an experienced, qualified accountant who understands your business.