Whether you’re just starting working on your own small business, or it’s already up and running, an accountant can work wonders for you and may even be critical to the success of your venture. 

Here are some pointers to help you decide if and when your business needs the services of an accountant or a bookkeeper:

You’re just starting out

Launching a new business venture involves many moving parts: laying out the foundations of your financial structure, creating a sound business plan, calculating the break-even point for price-setting, assistance with business loan applications, taxation, and more. 

These are all issues where an accountant can contribute by helping you navigate tough decisions, and avoid critical pitfalls and beginners’ mistakes.

You’re planning or expecting rapid growth

Growth and expansion are exciting opportunities for any business, but must be well planned to ensure you don’t bite off more than you can chew, and that your business is prepared to handle the expected growth from all possible aspects.

Accountants are far more than mere ‘number crunchers’. They are the most trusted advisors businesses have, providing them with financial guidance and advice. Accountants can help you with planning expenses, payroll and employee tax management. They can provide cash flow projections and financial analysis, and guide you through the process. 

You want to focus on managing your business, not on your books

Sure, many business owners do their own bookkeeping. But it takes time and drives your focus away from your core business. You need to acquire a basic understanding of accounting, bookkeeping, and taxation, as well as knowledge of using bookkeeping software. 

If you want to be fully available to handle the management and growth aspects of your business, you should consider outsourcing your bookkeeping to an accountant or a bookkeeper.

Letting a professional manage your books will help prevent accounting errors and oversights in data entry. It will also increase your business’s financial visibility: you’ll have balance sheets and financial statements readily available, and someone to provide you with insights to help run your business more efficiently, increase revenue and minimize expenses.  

Managing bill pay has become too burdensome for you

Paying your vendors and getting paid by your clients is so much more than a technical process. Improper management of your accounts payable and accounts receivable can affect your cash flow and create complications for your business.

You have to keep track of all outgoing payments, ensure you pay your bills on time so you don’t incur any penalties or risk your relationship with your vendors. On the other hand, paying too soon is adverse to your cash flow. You also have to regularly send out invoices to your customers, keep track of all due payments and ensure they’re collected and deposited on time.

Additionally, all transactions have to be recorded and appropriately classified in your books.

Delegating bill pay management to a competent accountant to streamline your accounts payable process will free up your time, optimize your cash flow and eliminate the risk of accounting errors.

You need help with your tax filings

Yes, you can competently handle your business’s tax filings by yourself

But still, an accountant will not only take the hassle of tax preparation off your plate, but will also ensure that everything is in order. Tax-filing mistakes can cost you dearly, and an accountant can prevent them.

Equally important, an accountant can help you with your tax planning and finding exemptions and reductions that can save you money. 

You want to improve oversight and prevent fraud

A 2020 report by the Association of Certified Fraud Examiners found that organizations lose approximately 5% of their revenue to fraud each year. Accountants have the tools, knowledge, and the ability to discover financial inconsistencies, alert you of red flags, and significantly reduce the risk of fraud in your business. 

You want to realize the full potential of your business

An accountant can help your business with cash-flow planning and forecasts, identify financial opportunities and increase profit margins. They can provide you with insights on how and if to improve receivables collection, inventory management and more. 

A tax accountant can advise you on your business structure, how to maximize tax benefits and deductions, and try to reduce your overall tax liability.

Accountants can also help you understand where your business stands in comparison to competitors based on their experience with your business sector, and offer actions for improvement, if necessary. 

How much should you pay for the services?

Pricing for accounting and bookkeeping services varies depending on service type, expertise, geographic location, and more. You can use this Intuit rate survey to get a general idea of how much you should be paying for the services. 

Have you decided to hire an accountant or a bookkeeper? We’re here to help you find the best one for your business. Read our article on how to choose an accountant for your business.