Accountants can help businesses reduce strain

Day traders and other small business owners who may feel overwhelmed with workloads could look into accounting help as a way to streamline businesses, Ron Consolino, a management counselor wrote in an article for The Houston Chronicle.

For those who want to make sure they have a solid base of record-keeping, it may be wise to consider the option of an outside accountant. When business owners start out, it's popular for them to do it on their own, Consolino said. But when organizations like day trading companies start to grow, it could become too much of a laborious task.

Hiring someone who specializes in the bookkeeping trade could save a lot of time, and also minimize errors, he said. Beyond this, an accountant, or even an accounting firm could help the situation. Other than keeping track of finances, these people and organizations can give accounting tips and advice on other purchasing decisions.

It is important not to just jump into a relationship with an accountant or other related professional, Consolino said. If an accountant or bookkeeper is on a day trading company's radar, listing all the organization's needs and giving them to prospective help is a good idea.

Sometimes one company is a good choice for all the work, but it depends on what work is available, and how much is needed to be done, he added. Other members of the day trading industry may shed light on who is a good bet for solid work. Other resources such as attorneys and financial institutions may have solid advice for what firm would be a good idea to use.

Traders: Too much work, too little time

A recent survey by CFO Magazine found most business owners may struggle with time when it comes to getting work done. This may mean that day trading companies should allocate extra work, such as accounting and other financial documentation, to other organizations and entities.

More than 300 individuals working in the financial field were polled, and about 25 percent of respondents said there is not enough time to do the amount of work that needs to be accomplished, the news source reported. Those who work at the top of small and medium-sized organizations are reporting an increased number of responsibilities, which cuts into their ability to accomplish their normal work.

Despite the fact many traders and other leading people are feeling the weight of their work, not everyone has to feel like they cannot accomplish what needs to be done, according to the news source. An increase in being proactive could be the answer.

"It's not about managing time, it's about managing events," William Staats, an executive coach with Peak Performance Plus, told the news source.

Those day trading for a living may want to make sure they have all of their ducks in a row when it comes to organization. The job can be stressful, and not having responsibilities under control can make it impossible to get much done. Problems such as these can also increase the possibility of errors, which in the financial world, can be costly.

Many of those day trading for a living started in the business working for themselves and by themselves, so it can be difficult for many to make the leap into hiring another firm to deal with bookkeeping or accounting. But making that move may be a positive step for many companies, Entrepreneur Magazine states.

While there are some basic accounting software programs available, many of them fall short of what many business owners need. In fact, the magazine says many small business owners who bring in outside help say they find out the company isn't doing as well as previously thought.

The source says both accountants and bookkeepers can be very useful for small business owners to take advantage of. An accountant can help with the "big picture" scenarios, such as tax strategy and other accounting tips, and may be able to come up with a strategy to better position the company.

By comparison, a bookkeeper can remove the strain of many of the day-to-day financial duties, such as invoicing, which may not be terribly difficult, but can be time consuming.

"Knowledge is power," business owner Aaron Sylvan told the source. "If you don't have a bookkeeper, you're probably not being as strategic as you could be in how you spend your money."

In addition to their expertise and knowledge, day trading companies that send out their bookkeeping and accounting work can find they have more time open for other endeavors, making it easier for them to focus on the job at hand.

Many may benefit from incorporation

Forbes columnist Jim Blasingame says while many small businesses and day trading companies may start out as human businesses - such as sole proprietorships or partnerships - there may come a time when it makes sense to change that.

Blasingame says there are a number of reasons why traders may want to consider incorporating their company as either a corporation or a limited liability company. The first of those reasons is that the business could become eligible for additional tax deductions or other benefits.

A business owner may also benefit from the liability protection afforded them by the corporate structure. For those operating as a sole proprietorship, any claim against the company is also a claim against the business owner themselves.

After incorporating, Blasingame says business owners should follow several steps to maintain those protections. He says traders should be sure to tell all suppliers or other contacts the business is a "non-human entity," include it in all documentation, keep separate financial records and follow proper documentation procedures.

He adds many other firms may not take a business as seriously if it is listed as a sole proprietorship.

The same may be true with the Internal Revenue Service, particularly for traders. The IRS' guidelines about what qualifies someone as a professional trader are somewhat vague. In some situations, it may be useful for traders to incorporate in order to portray their professionalism to the agency.

Outsourcing can help traders make most of their time

There are a number of time demands every day for day traders, putting a significant strain on both their work and home lives. PsychCentral reports many may be well-served by looking to clear some things away from their plate.

As author Laura Vanderkam writes, there are only 168 hours in every seven-day week, so it's necessary for business owners to prioritize their time and stop wasting time on unnecessary tasks, according to the report.

The first step, the source says, is to physically write down how they spend their day, so they can see how long each task takes them on a regular basis.

After that, business owners can review that list and single out things they enjoy or are good at, and those they would prefer not to do, such as keeping track of their daily accounting and bookkeeping numbers. To ease their time demands and spend more time with enjoyable activities, it may make sense to find a qualified outside resource to handle them.

Once the plan is in place, traders can revisit their schedules to see if there are other ways to arrange their daily activities to slot in more time for positive tasks.

Time is a valuable commodity to all small businesses, particularly day trading companies. A recent survey by U.S. Bank found two-thirds of small business owners felt their time demands were a strain, and roughly half don't think they will be able to take more than two weeks of vacation.

Financial statements remain complex

Many small business owners are struggling to keep track of their financial statements, and making mistakes on such documents could be both dangerous and costly, according to CNNMoney.

Due to so many day traders dealing with a large amount of varying fees, it can be easy to overlook something. A person who is not an accountant is not necessarily expected to understand the paperwork involved with the financial aspects of a business, but they should seek help from someone who does know what such information means, the news source reported.

Even credit card fees and statements can prove to be problematic for some day trading companies, and it may be vital for these people to have a third party examine this information in order to keep financial information accurate.

"We are business owners," Mike Craighill, a business owner from Billings, Montana, told the news source. "We are working. We are taking care of the customers. I don't have time to spend looking over every single line of the credit card statement."

Those who make a living day trading stocks may want to hire a firm that specializes in bookkeeping to eliminate this hassle. With so many trades per day, it can be nearly impossible to keep track of every move that is made. An option such as this could be extremely useful, as it could minimize accounting errors attached to day trading practices. This will prove helpful later on when taxes are due, as omitting transactions could have significant consequences.

Important to keep control over bookkeeping

For obvious reasons, the tedious task of bookkeeping is one of the most commonly outsourced jobs for all small businesses, Flying Solo reports. However, outsourcing the process doesn't mean small business owners should start ignoring it.

According to the report, day trading companies that outsource their bookkeeping should still keep an eye on any assets or expenses along with overall management data.

The source says even though many traders started outsourcing in order to avoid constantly looking over their balance sheets, it may be a wise idea to look them over on a somewhat regular basis to make sure everything makes sense. If there are any question marks, the bookkeeper should be able to quickly explain them, or else raise questions about their abilities.

Flying Solo adds small business owners should also keep some level of control on other management data, such as profit figures or comparisons to any industry averages to see if there are any discrepancies.

The source adds business owners shouldn't be afraid to ask their bookkeeping firm for accounting tips relating to the business, since they are already paying the firm for their help in running the company.

For many traders, outsourcing bookkeeping may make the most sense, as relatively few may actually have an accounting background, and could make errors that hurt the company, says small business author Ruth King, who says small business owners' strengths are in the core of their companies.