Accounting plays a vital role in running a small business by helping owners track income and expenses, while ensuring statutory compliance. An experienced accountant provides measurable financial information which can be used to set goals and make business decisions.
If you are ready to delegate important financial management, we’ve outlined how – and why – to make the right choice for your team.
An accountant does much more than bookkeeping. Hiring the right professional puts a trusted partner on your team to help you establish and grow your business. Here are services typically managed by an accountant:
A bookkeeper sets up the foundation for accountants, tracking finances by recording transactions. This gives a holistic view of your business so you can easily see the amount of money coming into and leaving your business.
Bookkeepers are tax compliant so you can avoid penalties and fees from the IRS. Accountants are qualified to handle the entire business accounting process, while bookkeepers handle recording financial transactions. For accuracy, accountants often advise bookkeepers and review their work. Bookkeepers take care of financial transactions so accountants can analyze the data.
Entrepreneurs are a lot of things – driven, creative, and experts in their market. However, many business owners can easily get in over their heads when it comes to crunching the numbers. Here are signs it might be the right time to bring on help:
Generally, an accountant must have a bachelor’s degree in accounting or another finance degree. Accountants can be awarded additional professional certifications like Certified Public Accountant (CPA).
Here’s information that can help as you look for an accountant that’s the right fit for your business.
Now is not the time to place a CraigsList ad! According to Entrepreneur, the best way to find a good accountant is to get a referral. Check with your attorney, banker or another business owner. The Society of Certified Public Accountants in your state can also make referrals or check with a local college.
There are many small businesses that can get all accounting needs met by one outside accountant. Other businesses have more complex needs and require a full-service accounting firm. Some businesses prefer to have an accountant on staff. Once you’ve determined your needs and looked at your budget, you can decide which direction to go.
Take a look at all of the financial responsibilities of your business. Where do you need a professional to take the reins? Make a list and be sure to hire someone who checks all of the boxes you require.
Small businesses present unique situations and challenges. Make sure the accountant you bring on has experience in the areas where you need support – taxes, audits, financial records, bookkeeping, etc. If possible, find a professional who has worked with other businesses in your industry before. A restaurant owner might have different needs than someone running an e-commerce company.
Is the accountant's style and personality compatible with yours? If you’re looking at bringing on a firm, determine who will be your point person. The CPA you initially meet with might not be one you work with day-to-day.
You should always ask about fees upfront. Firms can charge by the hour or work on a monthly retainer. The same is true of an individual CPA. You shouldn’t base your decision on only cost – weigh experience as well.
Before you make your final decision, ask to speak with current and past clients, ideally in your industry. Reach out to gauge satisfaction with the accountant's services and fees. Availability is also key. You want to be able to get in touch with a key contact for your business.
Not every business owner will need to add an accountant to their team. However, there are exceptions. You might not need an accountant if the following is true: