Accounting Business Loans: How to Best Utilize Funding
As you likely know, to grow your business, you’ll need access to additional working capital. Due to this, many accounting business owners pursue a small business loan in order to expand.
Having access to a business loan can help you take on bigger projects with larger potential returns than you could pursue without increased cash flow. To determine how you should utilize an accounting business loan, consider these investments:
5 Ways to Use Your Accounting Business Loan
1. Technology Advancements
If your business’s accounting software needs to be updated, now is the perfect time to do it. You’ll have time to familiarize yourself with new software and convert your client files from the old system to the new.
Using your accounting firm business loan, you could invest in cloud-based software, upgrade to an enterprise-focused accounting product, or pay for other advancements.
2. Marketing Plans
Tax time is traditionally the busiest time of year for small business owner sin the accounting industry, but there are many businesses who need year-round accounting services.
It may be beneficial to devise a marketing plan which focuses on clients who need non-income-tax services. Using your loan amount, you can pay invest in marketing strategies such as:
- Sponsored social media posts
- Update business branding and signage
- Direct mail campaigns
- Other marketing efforts that will attract new customers
3. Training and Specialization
Due to recent tax law changes, it may be worthwhile to pay for training courses that will teach you and your staff about updated accounting practices and rules.
In addition, as you likely know, accounting firms can charge higher rates when they have a specialty. There are many incremental certifications in different accounting fields that will allow you to charge higher rates.
In fact, The Institute of Management Accountants released a study showing that accounting professionals who have a CMA or CPA credential make an average of 40 to 60 percent more income than professionals without these credentials.
If you’re interested in specializing, check out The American Institute of CPAs list of broad categories of specialization. You can also specialize in serving specific industries, such as restaurants, franchises, or manufacturing companies.
If you choose to expand your skill set to cover an underserved niche, you could use your term loan or business line of credit to pay for training in that niche.
4. Hiring and Payroll
Having more employees means that you’ll be able to serve more customers. Therefore, you should consider using your working capital loan to hire and train new staff before your busy season starts again.
It’s also important to note that there are many seasonal tax workers who may accept lower hourly rates for a full-time role, instead of a seasonal role.
5. Location or Facilities
If your accounting firm is currently crammed into a small location, you could move to a larger space, or open an office in another city that is popular for your target niche. You might also consider converting from leasing to owning your own commercial property.
Due to the ongoing COVID-19 pandemic, it may also be necessary for your business to take additional safety precautions. If your employees are working in an office setting, you’ll need to invest in desk separators, social distancing signs, masks, and other costs.
Conclusion: Business Loans for Accountants Are Available!
Now that your busy season has ended, it’s a great time to invest in growing your accounting firm. A business loan from a reputable financial institution will allow enable to improve areas of your business.
Now that you’ve learned about how you can best utilize your accounting business loan, it’s time to select the investments that will benefit your particular company. Every business is different, so it’s crucial that you determine how to best improve your operations.
Good luck on your search for accounting firm loans; additional financing will certainly benefit your small business!
Editor’s Note: This post was updated for accuracy and comprehensiveness in August 2021.
Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author's alone, and have not been reviewed, approved, or otherwise endorsed by any of these entities.