Should I Hire an Accountant for My Small Business? This is How to Tell


Do you think you need to hire an accountant for your small business but you’re not sure?

You probably don’t need to hire a full-time in-house accountant, but most small businesses can benefit from using an accounting service.

Using an experienced accountant cuts down on the stress of getting your books done accurately and on time.

If you’re not sure if it’s worth the expense to hire an accounting service, keep reading to find out when one can help your business.

You’re Setting Up a New Business

If you’re just starting your business, hiring an accountant is a good idea, even if you don’t continue using their services.

Getting your books right from the start helps you avoid financial, tax, and legal issues down the road.

A session with an accountant when you start your business can ensure you choose the right business entity, choose accounting software that works for you, choose the best type of accounting method, and understand how to record tax information.

Picking the right business structure can be important for your finances and tax benefits. An accountant can help you decide which option gives you the best financial advantage.

This sets you off on a strong financial footing with bookkeeping that’s accurate. You can check in with your accountant periodically to ensure you’re following the procedures accurately.

Your Taxes Are Confusing

Accountants are busy during tax season. Individuals and businesses often rely on them to help prepare and file tax returns.

Business tax returns can be a lot more complicated than your personal returns. If you do them incorrectly, you could owe a lot more money in penalties and late fees.

Having an accountant take over your tax prep increases the chances of filing an accurate return.

While only about 0.5% of returns are audited, you don’t want to make yourself more of a target because of how you complete your return. Accountants know what types of things are red flags that might cause an audit.

Some returns are chosen randomly for audits. If you find yourself getting audited, either because of a red flag or random selection, your accountant is there to support you through the audit.

Your accountant can help gather your records and talk to the IRS on your behalf. This can increase the chances of the audit going smoothly for you. It may also put your mind at ease knowing you have a financial expert by your side.

You Need Help Managing Your Cash Flow

Your cash flow is crucial in your business. You need a solid understanding of where your money’s going.

You’ll have incoming money and outgoing money. It can be difficult to keep track of not only what you owe to other people but also who owes you money.

If you fall behind on your accounts receivable or accounts payable, it can leave your business bank account a mess.

Uncollected invoices owed to you by customers can cause financial strain. An accountant can help manage those invoices to ensure your business gets paid on time.

You also need to ensure that you’re paying your vendors and creditors on time. Falling behind means you’ll have late fees and additional finances charges that eat into your profits.

You Don’t Have Time to Keep Up With the Books

If you’re not naturally a numbers person, handling your business accounting can be quite time-consuming. It’ll probably take you longer to do the work than it would an experienced accountant.

The books have to get done, but doing them yourself takes you away from the activities that can help your business grow. You can’t focus on your expertise.

Even though you’re paying to hire an accountant to do the books, it’s often a cost-effective option.

Your Books Are Too Complex

Are you in over your head when it comes to accounting?

It’s okay to admit that accounting isn’t your thing. Many accountants would feel lost trying to understand your area of expertise.

As your business grows, taking care of the accounting becomes more time-consuming and complex. Trying to handle it when you don’t really understand it creates more stress than you need, and it increases the chances of a mistake.

An accounting service that specializes in small businesses can deal with any accounting situation you have.

You Need Help Making Decisions

Accounting isn’t just about recording what happens in your business. It helps you monitor your business finances and make decisions for the future.

But if you’re not sure what all of the numbers mean or how to use them to make decisions, they won’t do you much good.

Accountants can not only make sure your books are correct, but they can also help you understand the data.

Your Business Is Changing

Small businesses grow and adapt, which means your accounting situation now might not be the same as when you started.

Any time you experience a change in your business, it’s a good idea to have an accountant to walk you through the financial side.

That’s especially important if you’re expanding and want to apply for a loan or you’re thinking about changing the structure of your business.

Or perhaps you’re hiring your first employee and you need an accountant’s help to understand how payroll works.

You’re Worried About Accuracy and Compliance

If you’re not an accounting or tax expert, it’s very easy to make small mistakes that add up to big issues. You could spend hours researching all of the applicable codes and regulations that dictate how you need to keep your books.

Hiring an accountant is an easy way to eliminate that worry. It’s an accountant’s job to understand all regulations that apply. They also stay updated when the laws change, so they can immediately make necessary changes in their clients’ accounting records.

Decide if You Should Hire an Accountant

Before you hire an accountant to help with your small business, consider your current situation. Most small businesses benefit from having an accountant to handle at least part of the books.

Explore our bookkeeping and accounting services to see how we can simplify your financial management.