With our annual deadline for filing tax returns just barely in the rearview mirror, you may have recently faced the decision of whether or not to hire an accountant to handle your business’s finances. It can be quite a predicament the first year you’re faced with this decision and in subsequent years as well. You want your small business accounting to be done correctly, but is it worth the extra cost to hire an accountant? Will you work with them throughout the year or just at tax time? One day you may even need to bring on a full-time employee to handle these financial concerns.
When you’re just starting out, software like QuickBooks may work just fine for your new venture. Eventually though, you may start to feel the growing pains as financial questions arise. For many of these questions, your SCORE mentor can offer valuable advice, but there are also reasons why hiring an accountant is a smart investment in your small business.
So you’ve reached that point in your business growth where you need “someone,” whether that be an accountant or a bookkeeper, to handle your business finances. The question of bookkeeper vs. accountant comes down to what functions you are looking for them to serve. A bookkeeper typically handles day-to-day operations like invoicing, payroll and collections and might work part-time once a week or so. An accountant can give more strategic, high-level advice about the business’s finances and will more likely be a phone call away, as needed throughout the year. They will also handle those pesky tax returns come April. It is also good practice to get referrals from other business owners. Once you’ve decided on the individual or company, put a 60-90 day trial period in place. This way you can decide if you’ve chosen the right person to add to your team.
This SCORE eGuide also has great advice and some easy tips for your small business’s financial health.
Eileen P. Gunn says, “It’s time to hire full-time help, though, when you’re calling your accountant often enough that you wish he or she were in the office all the time. Bring in a full-time bookkeeper when your part-timer is spending two or three full days in the office and still falling behind.”
Working with your SCORE mentor to assess when it’s time to bring on an accountant is a great first step. Not only will they offer their own expert insight into the situation (for free) but they can also evaluate whether or not the business has a reached a critical point that demands outside help be hired. Once your finances are in order and on their best path to growth, you will have a better grasp of what you can afford to spend on other areas of your business.