Hiring an Accountant: 10 Things You Should Know

Defining your business goals is one thing—making it all happen realistically and practically is another matter entirely. Three general activities are required for setting up and maintaining an effective accounting and recordkeeping system. It’s easy to think of accounting or recordkeeping as a “necessary evil,” created and maintained to satisfy government reporting — primarily taxes.

To Avoid Costly Mistakes

They can help you choose between an LLC, S-Corp, or C-Corp, set up your books properly, and establish financial processes that can scale with you. For example, imagine you’re planning to hire three developers in Q3, but your biggest enterprise client pays invoices on a net-90 basis. While hiring an accountant is an investment, it’s essential to weigh the costs against the potential savings and benefits. A single accountant can help you file tax returns for multiple businesses.

There several accounting software options you can use to run your accounting services. The best accounting software will help track your business income and expenses, prepare taxes and give reports on your financial status. An example is Zoho Books, which offers advanced features, such as time tracking and project accounting.

Eventually, your stack of hats will become so tall and unwieldy that it’s likely to fall over. After your business begins to flourish, should i hire an accountant for my small business your finances may become significantly more complicated. This is especially the case as you begin to make more new hires and earn more income—and, of course, spend more money, too.

Or, it may make sense down the road depending on the size and goals of your company. If you’re not ready to add the salary and benefits to your payroll, you can always outsource. When you outsource your accounting work to an on-demand professional, you pay for the expert time you need, which might just be a few hours a week. A good bookkeeper can handle a lot of it, including the daily tasks of updating records and customer payments, inputting invoices and employee hours and tracking transactions in the accounting system.

Benefits of hiring an accountant

Although there are certain restrictions, the TCJA allows for a new tax break for small business pass-through entities, an equivalent of up to 20% of its income. If you’re searching for ways to improve your cash flow, while creating more efficiencies around your expenses, Wilson Porter can help. We have all of the expertise you’re looking for — from payroll to business development — that can help your company thrive. Focus more on improving your business through stellar customer service or marketing, rather than spending your energy on financial details. They tended to choose their accountants for advice over everyone else (including their attorneys, financial planners and family members). Another advisory service they can offer is with your company’s legal structure.

• Many small business owners opt to handle their own accounting, especially in the early stages of their business.
• Whether you choose to handle your accounting yourself or hire an accountant, there are tools and resources available to support your decision.
• Proper bookkeeping is essential for understanding your business’s financial health.

Qualifications and experience

• When considering how to pick an accountant, the cost of a small business accountant can vary based on factors like location and the complexity of your financial needs.
• While opting to hire a small business accountant will cost you money, it can also save you a lot in the long run.
• Check their standing with the state board of accountancy and verify they have no disciplinary actions.
• An accountant can offer valuable insights and strategies at any stage of your business, helping you make informed decisions before small issues snowball into bigger challenges.

When you’re a Pro, you’re able to pick up tax filing, consultation, and bookkeeping jobs on our platform while maintaining your flexibility. Get $30 off your tax filing job today and access an affordable, licensed Tax Professional. With a more secure, easy-to-use platform and an average Pro experience of 12 years, there’s no beating Taxfyle. Accountants can help you with everything from daily bookkeeping to representing you in a tax audit (if they have the proper accreditation).

Can Accounting Software Replace an Accountant?

But who should small business owners turn to when they need strategic or operational advice about running their businesses? You’ll have to weigh up the benefits with the cost to decide if it’s time to hire an accountant. I wish I had hired one sooner, and that’s the case for many of my entrepreneur friends. When you’re ready to hire one, check out Upwork and 1-800Accoutant to find qualified professionals. I know you’re probably not here yet, but there’s a chance you’ll want to sell your business in the future. Accountants can gather financial records and prepare reports, talk to potential buyers during the due diligence process, and structure your financial affairs so you get the best deal possible.

Costs vary depending on the complexity of your needs and the specific services you require. They could typically range from hourly rates for specific tasks to monthly retainers for ongoing services. Working with an accountant means you can focus more on growing your business while they take care of the financial details, providing clarity and confidence in navigating your business’s financial needs. Outsourcing your accounting needs to a CPA or bookkeeper can be one of the best ways save time and make sure your financial needs are met. The first step prepared you for this one, and knowing if you want part-time or full-time help helps you search for an accountant.

An objective set of professional eyes will lead you to smart financial moves you might not have considered on your own. They’ll also be extraordinary resources to lean on when applying for business loans, working with angel investors and other investments, and perhaps even when applying for small business grants. He has over 15 years of business experience spanning multiple sectors. This blog discusses all things finance related to your eCommerce or startup business. We blog about accounting, bookkeeping, eCommerce, startups, and money.

An accountant can help you with small things like bookkeeping, payroll, and complying with tax regulations. Some small business owners prefer to handle their finances themselves. While this can save money, it requires a significant time investment and a solid understanding of accounting principles. The risk of errors is higher, and managing complex financial tasks without professional help can be challenging. As your business grows, so does the complexity of your financial transactions. More clients, increased sales, and additional expenses can make managing finances overwhelming.

Detailed documentation of qualifying activities and expenses is necessary to substantiate claims and ensure compliance. Quarterly estimated tax payments are due on April 15, June 15, September 15, and January 15 of the following year. Accurate financial projections are necessary to meet these deadlines and avoid underpayment penalties. Businesses must carefully assess cash flow and revenue patterns to make timely payments.

We’ve highlighted several scenarios where hiring an accountant makes perfect sense. They’ll help you evaluate whether your business is financially ready to take the next step and can help you strategize on budget allocation, assess potential risks, and identify funding options. Employers use Form 941 to report income taxes and Social Security and Medicare taxes withheld from employee paychecks, along with the employer’s portion of these taxes. You’ll need to pay higher rates for these accreditations since they portray credibility. Also, someone with a significant clientele is expected to have more experience, which will help your financial growth, so you should pay them more than a recent graduate.