When you run a business, there are many things to think about. If you have a business partner or business associates, then you have to figure out how to split the profits with them. If you are working with consultants, you need to figure out how much to pay them for their services. If you are hiring new people, you need to think about how much you’re going to pay them. These are all financial matters for which you require the expertise of your accountant.
In general, when you work with business partners, the two of you are involved in the business in different ways. One may provide the capital for the business while another might be involved in the day to day running. One might have provided 25% of the capital while another might have provided 75%.
So the amount of profits that each partner gets depends on how much they are putting in. Since the calculations can get complex and you may not know how profits are usually divided in such cases, you should consult your accountant.
Maybe you have business associates that you work with to make your product. Perhaps they provide the raw materials while you run the factory which makes the product. Or maybe they are located overseas and are using their contacts to sell your products in that country. Business associates are of many different types.
In general, you should have a contract with them which defines how much each of you is going to get from the overall profits. If you’re not sure how things need to be divided, you can consult your accountant first, in order to figure out what sounds fair. And your accountant can also work with you later on, when the profits come in, to make sure there is an equitable distribution.
You might have consultants for the marketing, HR or sales components of your business. And as your company grows, you might also need to hire new people to keep up with the public demand.
How much do you pay consultants and new hires? You can consult your accountant before finalizing these sums so that you don’t end up paying more than you can afford.
Contact us to learn more about the situations which call for your accountants’ expertise.