Should I Hire An Accountant For My Small Business?

There are several compelling reasons to hire an accountant at various phases of your company’s development. First, an accountant can help you with anything from business strategy to company creation, loan applications, and government audits.

That doesn’t mean you have to hire an accountant full-time or on a retainer basis all of the time. Sometimes only a few hours of their time is plenty.

Like other small company owners wanting to save money, you may believe that you cannot afford an accountant. However, consider how long it would take you to complete some duties (such as taxes) and consider whether this is wise.

Perhaps you’ve just launched your company and are considering hiring an accountant. On the other hand, perhaps you’re still in the planning stages of a new business and are debating whether or not you need someone to handle your accounting separately before going all in.

If you ask an accountant whether you should hire someone to help you with your books professionally, you can be sure that they will say yes.

However, you may rest assured that they are not saying “yes” for personal gain. On the contrary, the majority of successful business owners who work closely with an accountant will tell you that having an accountant is a requirement. According to Intuit, the maker of QuickBooks, TurboTax, and other financial software programs, 89 percent of small companies believe that having an accountant or adviser helps them succeed.

Even yet, it’s realistic to question whether every small firm need an accountant. Isn’t employing an accountant overkill for a small business? Is it possible to “wing it” till you reach a particular amount of revenue?

When you operate a business, dealing with federal paperwork might be intimidating. This is why, when the initial tax file is due, so many small business owners engage an accountant.

They can, however, assist you with more than simply tax returns. They can also assist your organization while dealing with the government in various ways.

A qualified accountant will be able to:

Complete and file all of your company’s legal and compliance documentation.
Keep up with the newest tax rules for your business.
Prepare yearly financial statements
Keep the government’s company registry up to date with your firm’s status.
Maintain director and other administrative personnel records.
When a business is founded, a business partner exits or a new partner enters, organizes and record share/stock allotment.
Manage your payroll and make sure that all of your workers’ tax codes and payments are accurate.

Correctly preparing your tax records may save you money – maybe more than your accountant charges you. A qualified accountant will also propose strategies to free up cash flow, save money, and generate capital for development using their understanding of tax regulations and legislation.

It might be difficult to determine what kind of assistance you require for your small business because that assistance will cost you money. Unfortunately, however, your company’s finances are something you can’t retain.

We at Bookkept, Australian bookkeeping and accounting specialists, have done our research on [post title] and are here to share our findings.

Keep in mind, this information about this article is intended to be general in nature and is not personal finance and accounting advice.

Keep in mind that this content is intended to be general in nature, and is not personal financial advice. You should always consult with an accountant, finance or registered tax specialist to ensure that you are getting the right advice.

What Can an Accountant Do for Your Company?

You would be surprised by the breadth of skills that accountants possess. They are able to provide strategic advice and recommend novel ways to cut costs or raise one’s income. In addition to this, they will do away with or automate any administrative tasks that prevent you from concentrating on your primary business. If you hire an accountant, you will be able to run your company with increased clarity and self-assurance as a direct result of this decision.

Are you aware of the benefits that an accountant may provide? This might assist you in determining if it is worthwhile to hire one.

Data management, financial analysis, the compilation of financial reports, and ensuring that your company’s accounting processes are in compliance with regulatory standards are just some of the areas in which an accountant may be of assistance to you.

When to Obtain the Services of an Accountant

The vast majority of accountants will tell you that if they had done things differently, they could have saved their small business clients a significant amount of time, money, and headache. That is assuming those particular clients did not wait quite so long before requesting assistance. The bottom line is that there are certain crucial stages in the life cycle of your organisation when you don’t want to go it alone. These are the times when you want to collaborate with others.

Creating Your Company

The beginning stages of your company’s existence are one of those crucial times. A certified public accountant is someone who can help you design a strategy for your firm. If you aren’t going to be asking investors for money, do you really need a business plan? If you wish to lease office space, retail space, or manufacturing space, your landlord may require you to have one. In addition, rather than taking things as they come, it is prudent to have a plan of action and specific objectives for one’s company.

Give some direction on the organisational structure of your company’s entities. Even though the vast majority of companies start out as sole proprietorships, the nature of your enterprise or your personal financial situation can necessitate a different type of corporate structure being utilised. If you’re a freelancer, the absolute least you can do to protect yourself legally and financially is to consider forming a limited liability company (LLC). You should seek the assistance of a qualified accountant for this!

Help you obtain the necessary permits with your assistance. Oh my goodness, payroll accounts, business licences, and permissions to collect sales tax! Every state, and in certain circumstances, every city, has its own regulations for how businesses must operate within that state. In a similar vein, each business sector has its own particular norms and practises. You may need the assistance of an accountant in order to navigate the bureaucratic hoops and get your company off on the correct (read: legal) foot.

Assist you in setting up your accounting software. I’ll let you in on a little secret at the risk of losing my bookkeeper’s membership card: The majority of small businesses do not require a bookkeeper on a long-term basis straight initially. However, you’ll want to outsource or subcontract your small company bookkeeping at some time. You can probably handle your bookkeeping till then and engage a bookkeeper to undertake frequent inspections of your work.

Having said that, you should not even attempt to set up your accounting software, regardless of how straightforward it can look to do so. An accountant, particularly one who is certified as a QuickBooks ProAdvisor, can be of assistance to you in properly establishing your chart of accounts and can even train you on how to make use of the programme. Even if your accountant does not offer this service, it is possible that they are aware of someone else who does.

Tax and Compliance Issues

Whether you own a small or family-owned business, a major Australian brand, or a multinational corporation, your requirements for tax compliance may be as individual as your company itself and the path you’ve chosen to take it to greater heights.

As a business owner or leader, you must understand all elements of your organisation to ensure that it functions smoothly on a daily basis while also planning for the future. Regardless of whether you, as a leader, are focused on other areas of the firm, compliance and tax needs must be met. Failure to do so, or doing so poorly, can result in penalties, back-charges, and even bad press.

Even if you have a documented company plan, all of the necessary permissions and licenses, and brand new, bright, and ready-to-use bookkeeping software… Without an accountant, you’re not yet ready to move forward.

Hundreds of compliance roadblocks remain. For example, if you have the following:

There are a lot of concerns with sales taxes. In the United States, sales tax compliance is fast becoming a nightmare. If you’re going to transport your items out of state—or even within the same state in some cases—you’ll need to be sure you follow all applicable tax rules. There are applications that can assist you do this on a regular basis, but you’ll need the assistance of an accountant to get things set up.
Payroll complications Wage and labor compliance concerns can sink even the most prosperous companies. Some tools and systems can help you stay compliant on a regular basis, just as there are for sales taxes, but you’ll want an accountant to check in on you at least quarterly.
Requirements for additional reporting Creditors or licensing bodies may impose these obligations. Even the above-mentioned complicated tax concerns might result in additional tax responsibilities in different states. You’ll want to keep working with an accountant if you need to report on your financial situation for credit or certification or if you do business in many states.

Should I Hire an Accountant for My Small Business?

Accounting or recordkeeping is generally considered of as a “necessary evil,” created and managed to meet government reporting obligations, particularly taxes.

Accounting and recordkeeping systems are designed to help you make smart customer, marketing, pricing, and vendor decisions, not merely to comply with the law.

The duties involved with a company’s accounting and recordkeeping system, as well as considerations regarding who should execute the job and the distinctions between an accountant and a book-keeper, are explored in this essay.

We’ll also assist you in determining whether or not you should engage an accountant.

Accounting Tasks

The management and reporting of an organization’s financial information is the responsibility of an accountant at the organisation. In firms that are not very large, a single accountant could be responsible for all of the tasks related with a particular accountancy function. On the other hand, in larger firms, multiple accountants are frequently responsible for distinct accounting areas. It’s possible that both financial and managerial accounting are encompassed here.

When you run a small business, one of the most important things you need to do is keep accurate financial records. Your method of accounting plays a critical role in determining how much money you have in the bank at the end of each day and whether or not you will be able to cover the costs you have planned.

There are three primary responsibilities that must be fulfilled in order to establish and operate an efficient accounting and recordkeeping system.

Putting the system together: The process of documenting transactions and developing projections can be mapped out using a notebook, spreadsheets, or software specifically designed for accounting.
Making a transaction: Transactions consist of sales made, items purchased, wages and benefits paid to employees, number of hours worked, rent, information technology, insurance, office supplies, and any other expenses paid.
Reports can include a variety of information, such as the status of potential clients, sales made, sales made where customers have made the purchase but have not yet paid, expenditure comparisons with the budget and with the same time last year, various tax reports, financial statements, and information required to fulfil bank loan covenants.

To Outsource, or Not to Outsource

When beginning a new business, one of the first decisions you need to make is regarding who will be in charge of the company’s accounting. You can do it yourself, assign it to a member of your staff, or engage a book-keeper or accountant to perform it for you. These are your three alternatives. The founder of a start-up company typically handles all of the bookkeeping duties early on due to limited resources and the fact that they are frequently the only employee at the company.

When you have sufficient funds available for discretionary spending, you should think about outsourcing the procedure. It is essential that you carefully assess whether or not maintaining books is the most productive use of your time.

You decided to start your own business because you are very skilled at anything that can be done to make money, such as selling goods or services, developing software, manufacturing goods, or providing consulting services. Which use of your time would be more productive: going out and making sales or keeping your books? Unless you work in the financial services area, it is quite doubtful that accounting will be one of your strong suits.

A certified public accountant (CPA) and a bookkeeper are two sorts of financial specialists to consider if you opt to outsource. But, of course, you’ll want to keep both for distinct tasks because they have radically different talents and rates.

Certified Public Accountant

A Certified Public Accountant (CPA) has been given official recognition by a state examination board for having achieved the level of competence required by state law. However, the legislation imposes on these experts specific requirements, such as the ability to certify financial statements, and it also allows for them to be held accountable for any professional misconduct that they may be guilty of.

Accountants, like other professionals such as doctors and lawyers, can be classified as either specialists or generalists.

Tax accounting, mergers and acquisitions, and nonprofits are examples of accounting specialty. You must locate the best match for your requirements; initially, this will primarily be general accounting tasks.

CPAs may charge anything from $100 to $300 an hour in fees, depending on the industry they work in and the degree of difficulty of the task at hand. Therefore, it is best to hire an accountant only for the most complex or high-value projects, such as quarterly financial statements (especially if they are required by a bank or under a government contract), tax filings, ongoing or specific instance advisory services, or the financial section of your marketing strategy. In conclusion, it is wise to hire an accountant only for the most complex or high-value projects, such as quarterly financial reports (especially if they are required by a bank or under a government contract). Instead of hiring a full-time accountant right away, you should consider outsourcing these responsibilities until your company’s annual income reaches several million dollars.

Word of mouth is the greatest way to discover a CPA. Alternatively, you can go to CPAdirectory.com or the National Society of Accountants.

Bookkeeper

The ledgers of a company are the most essential financial papers, and it is the bookkeepers’ responsibility to maintain them. On a daily basis, transactions such as revenue and outgoings are recorded and posted to various accounts. Other examples of transactions that are recorded and reported daily include: With exposure to various elements of the accounting function, a Bookkeeper job description should emphasize the requirement for a good sense of time management and organizational abilities. It can also be a stepping stone to a more senior or specialized accounting career.

A bookkeeper ought to be given responsibility for day-to-day administrative tasks. These responsibilities include the collection of employee timesheets, the submission of purchase-order invoices for payment, the collection of client payments, the creation of bank deposit statements, and the entry of all transaction information into your accounting and recordkeeping system.

A bookkeeper may charge anywhere from $25 to $35 per hour, the exact amount depending on the industry as well as the services that are performed. Many startups and small businesses turn to part-time bookkeepers for assistance in establishing their accounting system and recording all of their transactions while they wait for their businesses to grow to the point where they can afford to hire full-time bookkeepers. Even if you choose to do your own bookkeeping, you could still need the assistance of a book-keeper when it comes to organising your accounting system.

Bookkeepers with similar skills will know which kinds of income and expenses are common in your business to track and report, which will save you time and ensure that your system is effectively set up.

Don’t Just Outsource it and Leave it Alone

Consider hiring an accountant or bookkeeper if you don’t have the time, expertise, or willingness to accomplish this task. Keep in mind, though, that this isn’t a circumstance where you recruit these people and then forget about them. It’s your business, and you’re in charge of the financial statements. You will be the one signing the document whether you provide financial statements to a bank, file your tax return, submit invoices to a government procurement officer, or any other usage.

As a result, you’ll require some knowledge of what’s contained. Examine relevant information and seek clarification if anything is unclear.

The Benefits of Accountants for Every Small Business

If your business is growing, as we sincerely hope it is, scheduling a meeting with an accountant every three months can be beneficial in a number of different ways. It’s a good idea to check in with your accountant every three months to make sure you’re progressing in the right direction. If you can believe it, expansion of your business could actually be harmful to it at times. Regular consultations with an accountant can help you steer clear of making mistakes like moving too rapidly or in the wrong direction with your business.

Your tax payments are enough on a quarterly basis. However, your tax burden rises in tandem with your income. If your firm grows significantly, the predicted tax payments you started with may not be enough. Meetings with an accountant on a regular basis will help you prevent a bad tax underpayment surprise.
You have the ability to look through your own blind spots. Although small business owners are experts in their fields, it can be difficult to see the forest for the trees at times. An accountant can assist you in taking a broad view of your company, which is critical for continuous growth.

When You Can Go at Things Alone

Isn’t it now possible to do your own accounting?

Sure, why not? But are you sure you want to? Remember how 89 percent of small company owners attribute their success to working with an accountant? 89 percent is a significant figure. So, while you may manage your small business without an accountant, you should seriously consider the additional advantages of joining the large majority of business owners who collaborate with a financial expert and get the benefits.

Maybe I Hire an Accountant Part-Time?

Consider if you need an accountant full-time or part-time, perhaps a couple of days a week. You may plan out this person’s schedule ahead of time. Perhaps half of the accountant’s time is spent on the ‘paperwork’ that the firm generates on a regular basis regarding its income and spending, while the other half is spent consulting with you on accounting strategy. This will contain his recommendations for how to best spend your company’s money on resources essential to maintain the firm profitable, depending on the financials.

Hiring a part-time accountant can save you money, and it could be all you need.

When Your Company Is Growing, Hire An Accountant

Companies do not usually expand at the same rate. However, a new customer or a large project may need you to expand your firm faster than anticipated.

An accountant can assist you with growth transitions like recruiting more personnel or expanding your office space. They’ll handle the details (payroll, employee tax management, property tax, utility payments, and so on), allowing you to focus on the larger picture of your company’s growth.

An accountant may also use accounting software to analyze your cash flow, inventory management, and pricing. They may also provide you advice on how to analyze financial data in order to build your firm correctly. They might also assist you in determining the optimal timing to launch a new product or service to your portfolio.

Do you need help with your bookkeeping? Bookkept is a trusted accounting and bookkeeping company in Australia. We perform cheap and quick tax returns for individuals. You can give us a call on (03) 8568 3606 or email us on [email protected].

Now, Go Find a Small Business Accountant

Working with an accountant is beneficial to every small business, but it is not always essential. Even if you decide to go it alone without an accountant, getting guidance from time to time is a smart idea. It may cost a few hundred dollars, but considering an accountant’s influence on your small business, it’s a minor investment.

Start looking for an accountant immediately if you want to be one of the 89 percent of business owners that notice a boost from working with a financial consultant.