During the starting phase of a company’s lifecycle, it is common for the owners to undertake all the critical roles in the company to save money, including the accountants’.
But managing finances on their own can pose a significant burden. There inevitably comes a time when the owners realise that they cannot do everything themselves and could benefit from the expertise of a professional.
Whether they need someone only to do tax preparation work or help them out with financial planning or budgeting, a reliable accountant’s help can benefit businesses in many ways.
This article will discuss when is the right time to hire an accountant.
You Don’t Have Enough Time
When you’re a business owner, your time is worth a lot in every sense of the word. That’s why you need to learn to prioritize and focus only on high-value tasks, such as promoting your business, looking for new clients, getting in touch with your prospects and customers, and improving your product or service.
All the time-consuming, repetitive administrative activities such as filing your taxes, managing the payroll, or working on your financial reports will take up a lot of your time. As a matter of fact, research shows that entrepreneurs spend up to 40% of their working hours on tasks that don’t bring returns, such as HR or payroll, leaving them less time to deal with matters that could allow their business growth.
So, instead of wasting your most valuable resource doing something you’re not an expert in, hire an accoutnant who could prioritize and handle the financial aspect of your business. This way, you will be able to use your time wisely and improve your company’s financial health.
Keeping the Books Balanced
No matter how good you are at crunching the numbers, balancing the books requires much more. It includes dealing with cashbooks, ledgers, business bank accounts, expenses, daily transactions, and payroll services.
Even though it might be possible for you to take care of all that while your company is in its early stages, the odds are high you won’t be able to keep up with all the requirements once your business starts expanding.
Staying on top of managing all your expenses, making payments to your suppliers, invoicing your clients, and employee compensation requires the service of a certified accountant.
Think of it as if you’re a real estate owner but instead of taking every call, handling maintenance issues, and collecting rent, you hire someone to do it. It’s the same with accounting.
Change in the Legal Structure
Business structures all have their pros and cons. An accountant can help you make this important decision and choose the most suitable type of legal structure for the business based on your needs.
Besides that, an accountant will ensure that your business complies with all government regulations and protect you against making expensive mistakes such as unpaid dues.
Furthermore, an accountant can help you lower your costs with a tax write-off and identify money-saving opportunities.
You’re Facing a Risk
Growing your business sometimes implies making difficult decisions that can significantly impact your company’s future.
One of such risks could be a large purchase or investment, such as real estate or equipment. If you’re unsure about investing or how it will affect your company, an accountant can provide a calculated second opinion and help you make an informed decision. You won’t have to rely on your gut feelings and throw darts in the dark when taking some vital business steps. When it comes to risk-taking, an accountant can evaluate your company’s financial situation and advise how much you can spend.
You Need a Good Business Plan to Raise Money
A business plan is essential for building a solid foundation for your business. Many business owners mistake not involving a financial expert when creating this critical document. The thing is that many companies require additional funding to grow. And due to the Covid-19 crisis, many small businesses needed loans to keep their business afloat.
When you’re thinking about looking for investors or applying for a business loan, you should know that the financial section of your business plan will be closely examined. By hiring an accountant who will ensure that your financial records are neat and tiny and include all the relevant information that might interest your potential funders, you’ll be more likely to secure an investment.
You’re Being Audited
Tax audits can be stressful, especially if you don’t already have an accountant. An accountant can help you with all the paperwork, and they will organize all documents you need to pass the IRS’s examination. They can even cooperate directly with the IRS on your behalf so that you can focus on the day-to-day running of your business.
There are several signs that it might be time for you to bring on an accountant for your business. Even if you’re just starting up, it’s still a good idea to find an accountant that will charge hourly to get their valuable guidance and avoid financial mistakes that could cost you down the road.