When should you hire an accountant for your business?

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Hiring an accountant may not be mandatory for all businesses, but having them on your back is a lifesaving option. You cannot miss accounting to survive the competition, where most startups fail to keep pace with fulfilling rising accounting needs.

Even if you are doing accounting yourself during the initial years, the business may show signs when you need to hire an accountant.

If you ask us, “Do I need an accountant” we’ll certainly answer, “Yes”. But, the question is when to hire them in your business. We will discuss everything about hiring an accountant in this post.

Table of contents

●  Bookkeeper or accountant?
●  When to hire an accountant in business?
●  How to choose the right accountant?
●  Conclusion

Bookkeeper or accountant?

The terms bookkeeper and accountant seem similar but have different roles that owners must understand. You can hire a bookkeeper initially to record transactions, create financial reports, deal with taxes, and stay compliant with government regulations.

However, as business starts expanding, your accounting needs increase. To fulfil these ever-rising accounting needs of a company, a certified or chartered accountant is a must.

They can help you analyse financial reports, look for opportunities and risks, get advice on business decisions, prepare business plans and budgets, reduce tax bills, etc.

An accountant is more qualified and efficient than a bookkeeper. They can help you deduce reliable solutions to any financial problem in the company.

Accountants also serve advisory roles for owners.

When to hire an accountant in business?

1. When starting a business
If you hire a personal accountant while setting up a business, they will help you in numerous ways.

It includes sketching excellent business plans, setting up an accounting system, selecting your business structure, keeping you informed about how to do your accounting, understanding tax obligations, etc.

2. To save time on recurring financial activities.
Every minute is valuable for business owners, and dealing with recurring financial tasks is time-consuming. When daily tasks like tracking expenses, recording and matching transactions, updating data or digitising receipts eat up most of your time, a bookkeeper can be the best fit. However, if you are looking for frontline professionals to examine business operations, trends, revenue and costs regularly, you may need an accountant.

They don’t necessarily take control of all your duties but modify or optimise your bookkeeping and accounting system to ensure a fast and user-friendly accounting environment.

3. Need in-depth financial planning and analysis
Hire chartered accountants with experience in your industry to provide in-depth financial planning and analysis.

Their knowledge and expertise help grow your business faster, analyse your profit and loss statements, cash flow statements and balance sheets, look for opportunities and risks, and efficiently run your business.

4. Applying for a loan or grant
When applying for a loan or grant, you must provide the lender with a detailed financial statement, profit margins, credit score, and necessary accounting details.

An accountant can help you organise the data and convince the lenders on your behalf. Plus, they might have a good social network that allows you to get investors or money lenders faster.

5. Preparing for taxes or being audited
Tax is a headache for every business, so hiring an accountant for taxes is better. They are well-informed about the changing tax laws at the local, state and federal levels.

Plus, tax accountants can look into your financial health and eligibility for tax deductions to reduce your tax bills legally. They ensure you pay the correct tax before the deadline and comply with tax laws.

6. Need advice in writing business plans
You can involve an accountant while writing a business plan. They use the right accounting software to add financial projections and other reports. It helps you create a realistic and professional business plan that is more likely to succeed.

Having a professional during the initial years will benefit you with financial knowledge and advice right from the beginning. It saves you time and money compared to hiring them later.

7. When you are ready to delegate
As a small business owner, you can be a master of everything from setting your working hours and crafting a business strategy to regulating your workload and determining your finances.

Due to overwork, you may be unable to delegate. It makes you feel overwhelmed and stressed, and choosing the right accountant can save your business. Make sure they’re reliable in sharing the company’s financial information. Now, you can use your spare time to concentrate on core business activities.

8. Deal with the government
Dealing with government paperwork can be daunting for your business, and small business owners may need to hire an accountant to work with more than just tax returns.

A good accountant can help you complete and file legal and compliance documents, update your company with the latest tax regulations and prepare annual account statements.

Furthermore, they can help you maintain records of directors and other administrative personnel, organise and record your stock allocation, handle your payroll, prepare your tax documents, free up cash flow, save money, raise capital, etc.

9. When your company is growing
Businesses may not always show a steady growth rate, but a new plant or a project can help you grow your business more quickly than expected. You may need to hire employees and increase office space and equipment to handle these growth transitions.

An accountant can help grow a business and prepare your cash for urgent needs.

Additionally, they look after your payroll, taxes, utility payments, cash flow, inventory management, pricing, etc. They also provide valuable insight into how your business grows through financial analysis and determine the perfect time to introduce a new product or service in the market.

How to choose the right accountant?

You can hire an accountant online to save money and time.

Look into their client reviews, qualifications, experience, and qualities on the accountant’s websites. Or, ask for accounting firm referrals from close business associates.

Whoever you hire, make sure you set an interview and ask about their credentials, charges, range of services and availability.

Conclusion

When finances are simple, you can do accounting for a business in its initial stages. But having the right professional on your team is worth the money. They save your time and effort in doing accounting tasks and spare time for vital business activities.