Small business owners often long for the day they can focus on running and growing their companies. Hiring a part-time accountant or even a full-time accountant depending on the workload could be the solution. It may be the only way to break free of the necessary financial paperwork that is putting constraints on your time.
Hiring an Accountant for Small Business
Here’s a snippet of tasks that an accountant can take off your plate:
- Quarterly and annual tax filing
- Providing financial documents for loan and grant applications
- Acting as financial advisor
- Doing payroll
- Handling invoicing and tracking payments
Why You Should Consider Hiring an Accountant
Why is it important for small businesses to hire an accountant? Here are several compelling reasons why a small business owner should consider hiring an accountant—not just during tax season.
Perfect Financial Statements and Financial Records
Utilizing a professional to prepare your financial statements allows you to quickly access a clear overview of your company’s financial data. If you lack the ability to conduct regular financial analysis, you might lose focus on your goals and deviate from your plans. If you’re considering this option, you might want to hire an accountant.
Keep with Tax Laws and Maximize Tax Savings
When you’re focused on managing your own business, accounting tasks can often be overlooked. Hiring an accountant can assist you with tax planning and ensure that you maximize your tax write-offs during tax season. Certified public accountants will also help keep your business compliant with the latest tax regulations.
Business Management
By working with accounting professionals, you’ll have more time to focus on the daily tasks of running the business instead of accounting tasks. The right accountant can handle all the required business taxes with an eye to assisting you with financial planning.
Applying for Loans or Grants
Obtaining information about your company’s finances is straightforward if you are looking to apply for a grant or a loan. Your accountant is responsible for preparing financial reports and other financial information about the business and producing statements as needed. Additionally, hiring an accountant adds a level of professionalism to your company’s reputation.
Audit Representation
Certified Public Accountants and Accounting firms offer an important benefit. You’ll have representation in the event of an audit. In fact, according to data from accounting firms, you’re less likely to be audited if your return indicates your professional relationship with an accountant.
Less Stress
Tax returns? You can cross that off your list. Concerned about the accuracy of your bank account? Just draw a line through that one as well. When you hire an accountant with extensive knowledge of your business’s financial aspects, you’ll be able to worry less and concentrate more on your company’s growth.
When to Hire an Accountant
Many small business owners delay the decision to hire an accountant until it is clearly evident that these services are essential.
During that time, you may be missing out. There may be an accounting system that could be making your life easier. You may need tax advice. You may not have put your financial goals to paper.
If you’re not ready to hire a full-time accountant, consider starting with a part-time accountant. Many accounting firms offer these services, and you may find that you actually save money.
Remember that the fees you pay an accountant are tax-deductible as a business expense. In fact, you may want to build accounting expenses into your long-range business plan.
Read More: Accounting Services for Small Business
How Much Does It Cost to Hire an Accountant?
Costs vary according to the scope of the accounting services you require. Costs also vary by the level of education (certified public accountant with a college degree) and level of experience of the accountant.
If you’re hiring a self-employed accountant as a subcontractor, you should expect to pay at least $40 as an hourly rate. If you’re working with an accounting firm, you’ll pay from $100 to $250 an hour.
How to Hire an Accountant
How can you identify the individual with the financial expertise that aligns with your business operations? Financial requirements and tax circumstances differ from one company to another. For instance, sole proprietors have different needs compared to business owners with employees. If you’re unsure, it may be a good idea to hire an accountant.
1. List the services you’d love to turn over to an accountant.
2. Network with other business owners to find out which accountants or accounting firms they like and why.
3. Armed with a list of accounting interview questions to ask, make an appointment. There may be accountants or firms that offer a free consultation.
4. During the hiring process discuss charges including likely fees by task, financial statements, financial reporting, payroll, first tax filing, and any tax issues.
5. If you’re operating a new business, ask for accounting software recommendations as part of the interview process.
Tasks for a Bookkeeper
Typical bookkeeping services include keeping tabs on cash flow. A bookkeeper manages bank accounts, handles invoices and payments, and records transactions such as paying for purchases.
Hiring someone to provide bookkeeping services can be an interim step. It can also ensure that you provide good records to an accountant.
Accountant Vs. Using Accounting Software
There are a number of top-notch accounting software choices. Accounting software can make your tasks easier and can also make your accountant’s tasks easier.
There are things that accounting software can’t do: A computer program isn’t going to offer advice or give you tips about changing tax laws.
Freelance Vs. Fulltime Accountant
At what point do you need a staff accountant?
In a perfect world, that freelance accountant or subcontractor accountant will become your full-time accountant. You’ll be getting an individual who already knows your business.
You may be able to justify hiring a full-time accountant when you would be adding tasks. For example, you’re going to hire employees.
Does an accountant save a business money?
Yes. You may realize financial savings in the form of tax breaks you weren’t using, or by writing off accounting expenses.
Here’s a way to consider that decision: You may feel that you’re paying an accountant a higher wage than you would pay yourself. But remember, it would take you much longer to do the same work, and you’re taking time away from running your business.
Is Hiring an Accountant Worth It?
Yes. Even if you’re only experiencing stomach clenching and headaches during tax time. If you get something wrong with taxes, there are consequences. Hiring an accountant or accounting firm will reduce your stress for you.
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