As a small business owner and entrepreneur, one of the many questions you may be asking yourself is, "When should I hire an accountant?" The short answer: When you feel like you are starting to lose control over who owes you money and how much.
The long answer:
If You Need Advice on a Business Plan, Hire an Accountant.
Hiring an accountant in the early stages of your business plan development can make it more realistic, professional, and likely to succeed. This is because they are able to use accounting software to add financial projections and insights to it. Having an accountant on your team from the start has the added advantage of early financial advice and knowledge that could save you time and money down the road.
If You Need Help with the Business Finances, Hire an Accountant
Managing who owes you money, who you owe money, and how much can become a full-time job. An accountant can not only help keep track of employee payments, revenue, and cash flow, they can also monitor key business metrics that will help you understand your company's financial situation.
If You're Ready to Delegate, Hire an Accountant
Pros to being a small business owner: set your own hours, regulate workload, build out and implement your business strategy, and determine your own finances.
Cons to being a small business owner: inability to delegate tasks to people "who don't know your business as well as you".
We know where you are coming from on this, but the inability to delegate can leave you feeling overworked and spread thin. Which will negatively impact your business operations and performance. Delegating your company's financial affairs is a good start to creating more sustainable business practices. Finding and hiring an accountant you trust will allow you more time and brain power for other aspects of your business.
If You Have to Deal with the Government, Hire an Accountant.
Dealing with government paper and procedures can be a daunting task for a small business owner — or anyone for that matter. That's why you'll find a majority of small business owners hiring an accountant when the first tax filing is due.
According to Xero, in addition to helping you cope with tax returns, a good accountant will also be able to:
- complete and file the required legal and compliance documents for your business
- keep your company up to date with the latest tax laws
- prepare annual statements of accounts
- keep your company's status updated in the government's company register
- maintain records of directors and other administrative personnel
- organize and record share/stock allocation, such as when the business is formed, when a business partner leaves or a new partner joins
- handle your payroll and ensure that all employees' tax codes and payments are recorded correctly
- use their knowledge of tax laws and legislation to suggest ways you can free up cash flow, save money and raise capital for expansion
Preparing your tax documents correctly could save you more money than your accountant charges you.
In Case You're Audited, Hire an Accountant.
Now that's a scary word...
But luckily unlikely for most small business owners. For the few who may be audited though, it can be expensive, stressful, and time-consuming.
While it's better to hire an accountant before an audit ever happens, especially one with audit insurance, having one on your team during the auditing process is a good idea. They can give you advice on how to work through it and ensure you don't violate any tax laws in the post-audit future — because the government will have a closer eye on you and your business.
If Your Company is Growing, Hire an Accountant.
Growth is not linear. A new client or big project can mean you need to grow your company faster than expected. And an accountant can help you do that.
From hiring more talent and taking care of utility payments, to managing payroll and taking on more office space, hiring an accountant will leave you free to focus on the big picture of your business growth.
Before You Buy a Business, Hire an Accountant.
Acquisition Entrepreneurship is an emerging global movement that encourages entrepreneurs of all backgrounds to skip the startup and to buy an already established small business instead — after consulting with an accountant that is.
Hiring an accountant for the acquisition process allows you to look at understand the prospective company's accounts in details. For example, what the company's assets are — both owned and leased, whether there is any outstanding debt, and what the cash flow looks like.
Before You Sell Your Business, Hire an Accountant.
It's unlikely that you'll have run your business for years or decades without having employed the services of an accountant. If that is the case, then we highly suggest employing one before you sell. They will be in charge of putting your company's financial records in order and producing account statement to show to prospective buyers. An accountant will help you implement your exit strategy and be a key player in the due diligence process.
Finally, perhaps the most important thing an accountant can help you do when selling your business, is help you structure your financial affairs so that you can get the most bang for your buck. Depending on how the sale is structured, the amount of money you receive after tax can vary. An accountant will know how to maximize it and make it more tax-efficient (i.e. lump sum vs monthly payments).
Before Taking on a Franchise, Hire an Accountant.
Taking on a franchise is a popular business acquisition strategy and startup method. You can still be your own boss with a share in revenue and equity, but receive support in brand marketing, sales, and product supply.
Franchise contracts, the amount you pay to a parent company, and the amount you keep varies. An accountant can help you sift through the financial jargon of fees and percentages charges to estimate what your income would be. Therefore, helping you decide whether taking on a particular franchise is worth it.
You are not alone in your small business ownership and operations. Building a team of people you can trust is crucial to your entrepreneurial success. We're here to be your trusted financial expert and business partner at any stage in your career. Any time of day.
