Many insurance business owners aren't aware that 80% of businesses fail in the US within the first 18 months. The leading cause behind business failure is poor financial management.
Here are the top reasons that insurance companies need an accountant to improve financial management:
1. Maximize Your Deduction
Tax is a burden for every business owner, and not everyone knows how to maximize deductions and about the actual process of the tax return. In these financial matters, an accountant plays a vital role in insurance agencies. An accountant has the knowledge to identify potential deductions and can advise you on making better decisions while you finalize the list of year-end deductions. Owners often forget to track and records essential items such as home office space, depreciation, and other out-of-pocket expenses. Whereas, an accountant can take care of each and everything and keep track of the same.
2. Save Time and Effort
Many insurance company owners think they cannot hire an accountant due to tight budgets. But if they manage their finance on their own, they might end up in a little trouble in the form of errors in financials, poor investment decisions, and false reporting due to mistakes.
They already remain
busy with policy management, commission management, etc. thus, they need to
hire an accountant. If their pocket does not allow for a full-time accountant,
they can outsource insurance accounting back-office tasks.
3. Prepare for the Future
If they have an accountant, they can take help from the accountant to prepare for the future. They can ask them for previous financial statements and compare the current situation with the past, leading to better decisions for the future.
As an insurance company owner, you are most of the time occupied with your day-to-day business operations to run your insurance agency or company. However, an accountant can take responsibility for all your insurance back-office accounting tasks, allowing you to get more time to focus on future planning, marketing, core operations, etc.
If you are thinking about outsourcing due to the tight budget of your company, you can consider outsourcing to Cogneesol (providing services since 2008) – one of the best outsourcing firms across the globe for accounting back-office functions.
