When to Hire an Accountant

Guide for Business Owners: When to Hire an Accountant

As your business grows, how do you know the right timing to hire an accountant? Many business owners struggle with the commitment to outsourcing. It makes sense that you need the additional help. But, the cost of the service is often the reason the decision is delayed.

As we interact with small business owners, the answers to this question vary depending on the size of the company, the recent growth, and anticipated trends in the future. Often, some specific events or situations triggered the idea to hire an accountant. So, it is important that you talk to a finance professional to see if the services are needed for your company right now.

Why Business Owners Delay Accounting Services

Finances and cash flow are a foundational aspect of the future success of your company. So, why do many business owners delay accounting services? Here are some of the common reasons why people procrastinate this service:

  • Costs: Many startups require bootstrapping, which means that business owners wear many hats throughout the day. Instead of hiring professionals for the services, it might make sense to handle everything in-house in the beginning. It isn’t unusual to find a start-up founder staying after hours to pay the bills or process invoices that need to be sent. These strategies help to minimize startup costs. But, eventually you will need to take the leap to bring in the professionals to help with the services that are needed.
  • Cashflow: Another concern lies in the amount of money that will be spent on the accounting services. Can you afford to spend the cash on these services? The real question is whether you can afford NOT to hire an accountant. Even though you will pay for the services, there are many financial benefits that are available for your company: better financial decisions, tax deductions, and more. In fact, it might be costing you money if you delay the decision to start with outsourced accounting services.
  • Control: If a business owner has a micro-managing personality, then they might want to oversee the way the transactions are entered. Even though there are limited hours in the day, you might have a hard time delegating some of the busy work. Just because you did the books when the business started, doesn’t mean that you need to continue these tasks as the company grows. Look for ways that you can outsource tasks that are taking up your time. By handing off these tasks, you can free up your day to focus on other activities and responsibilities that are more important.

What is your excuse for not hiring an accountant? If you don’t already have someone to help with the finances of your small business, then right now is the perfect time to change your mind and implement a new financial system.

Opportunity Cost of NOT Hiring an Accountant

It is easy to see why business owners get stuck on the amount of money that will need to be spent on accounting services. But, these costs are minimal compared to the potential financial benefits that are available from an accountant. Bringing in a financial professional might be one of the best things that you can do to help your company grow.

An accountant will be able to optimize your financial system, helping to eliminate redundancies or things that are costing you money. This process can be essential to tighten down the overhead expenses, resulting in lower costs that need to be paid each month.

Accounting services can also be beneficial to ensure payments from your clients. It is easy for overdue invoices to slip through the cracks. You need a team that can watch the transactions to make sure that you receive timely payments from your customers.

Additionally, these services are essential to help you maximize the write-offs that are available for your company. Are you leveraging all of the tax breaks that apply to your industry? Only an experienced accountant will know the right places to look to find other options to minimize tax burden. It is common for business owners to find that the accounting fees are recovered in the tax savings alone.

Finally, you need to consider the opportunity cost that you are missing when you are spending your limited time on bookkeeping and accounting tasks. Instead of looking at product development or employee management, you are dedicating your time to busy work. If you keep your head in the books, then you will miss out on potential opportunities to help your company grow. It makes sense to outsource these services so that you are setting your company up for success.

Signs that You Need to Hire an Accountant

Here are a few sure signs that it is time to hire an outsourced accountant:

  1. You Don’t Have Experience with Accounting: If you are sick, then you schedule an appointment with an experienced medical professional. In the same way, it is important that you find someone with hands-on experience to help with your business books. If you are confused by financial reports and you have a hard time keeping up with the transactions, then it is time to hire an accountant. A small business accountant will sift through the information and provide the information in an easy-to-understand format to help you make better decisions for your company.
  2. You are Too Busy to Keep the Books Current: Is there a stack of invoices and transactions sitting on your desk? If you can’t keep up with the paperwork, then it is a sign that you need to outsource these tasks. Even if you can carve out a few hours a week to handle the bookkeeping, consider the other tasks that are neglected within your company. It doesn’t make sense for you to waste your time managing the books. Instead, dedicate that time to connect with new clients or work on your marketing strategy.
  3. You Don’t Know the US Tax Code: Do you stay up-to-date with the changes that happen each year with the tax code? If you aren’t working in the tax industry, then it is likely that you will miss changes that are applicable to your company. Failing to pay the right amount of taxes can result in fines and penalties for your company. An accountant is helpful to identify the right tax strategy, ensuring that you can maximize deductions while staying within the guidelines of the law.
  4. Your Company is Going Through a Rapid Growth Phase: You might have been able to keep up with the bookkeeping when the business started. But, if you are experiencing rapid growth, then the accounting tasks will grow as well. Not only are you facing more paperwork and reports that need to be analyzed, but the increased income can also affect your tax strategy. Make sure that you hire an accountant who can help you move through the growth patterns with ease.
  5. You are Struggling to Maximize Profits: Some companies find that their revenue is increasing, but they are having a hard time keeping money in the bank. If you don’t see that the profits are going up, then it is time to hire a financial expert to analyze your cash flow, expenses, and more. Your accountant will help you identify areas where you can reduce expenses, helping to increase your profit margins.
  6. You are Being Audited: A notification from the IRS about an upcoming audit can be one of the most stressful things that a business owner might face. There’s no way around the messy process that is required for an audit. If you want to protect your company, then don’t make the mistake of trying to navigate the audit without professional accounting services. An accountant can save you time and money, guiding you through this experience.
  7. You are Preparing to Merge or Sell the Company: Whether you are looking at an acquisition or you are preparing to retire from the industry, you need to make sure that you have an accountant to help with strategy. These efforts will maximize the price that you can get for the company. At the same time, your accountant can offer recommendations to decrease the amount of taxes that you will pay from the proceeds of the sale.

As you can see, there are many reasons why you need to hire an accountant. If you aren’t already using professional accounting services, then right now is a great time to learn more about the benefits. For more information, you need to talk to an accounting team that specializes in small business accounting.

There’s no doubt that accounting services are essential for every small business. Instead of risking the future of your business, we invite you to call us at Easier Accounting. We will discuss your needs and determine if our services are a good fit for your company. Our team understands the unique challenges that are faced by small business owners. So, we are always looking for ways to improve our services to match your needs. Call for more information: (888) 620-0770

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