Whether you’re getting ready to launch a startup or you own a small company, your business revolves around finances. From profits and losses to budgets and fundraising, most of your business goals focus on earning or spending money.
If you have a small business with limited staff, you may think that you can balance the budget, pay the bills, and make payroll with in-house resources. However, you should hire an expert to handle your company’s financial matters. Learn when and why your business needs a financial expert and find out how to hire an accountant to join your team.
Reasons your business needs an accountant
When you hire an accountant, your new hire certainly comes at a cost. In most cases, however, the benefits of hiring an accountant far outweigh the expense. Below are five reasons an accountant can prove essential for your business:
- File your taxes: Whether you’re a first-time business owner or you’ve already launched a handful of startups, you’ve undoubtedly observed that filing business taxes isn’t as easy as filing a personal return. In fact, filing your business return independently could cost you greatly in terms of both time and money. Public accountants can help you maximize your deductions while minimizing your cost.
- Hire contractors: You can’t run your company alone, but hiring employees and seeking contractors isn’t always easy, especially if you don’t know what kind of paperwork you need. Accountants can make sure that employees and contractors sign the right paperwork and receive the proper Internal Revenue Service (IRS) classification.
- Track profits and losses: If you’re a startup founder or a creative visionary, analyzing minor details or tracking cash flow may not be your strong point. However, you shouldn’t let payments or income records slide. Accountants can handle profits and losses, and they can also tackle payments owed and received.
- Get a handle on your assets: Every business has assets, but without expert advice, you may never learn how to maximize your own. Hiring an accountant can enable you to make the most of your business assets and benefit from their value.
- Improve your financial outlook: Even if you’re hitting your sales goals and generating the conversions you want, your bank account may not look the way you’d hoped. Accountants can analyze your income reports and sales charts, providing invaluable insight into your company’s pricing structure and profit model.
When to hire an accountant
If you haven’t contracted a finance professional to join your team yet, you may be wondering, “Why hire an accountant?” Watch for the following six signs that you need a financial expert on your team:
- You need advice about business structure: Even if you’re taking a bootstrap approach to launching your startup, you need advice from experts to make sure that you don’t make expensive mistakes. Consult with an accountant to understand the financial implications of incorporating, setting up a limited liability company (LLC), or forming a limited liability partnership (LLP).
- You need to set up payroll: Hiring new employees is an exciting step for any business, and it’s one that you want to make sure you do correctly. An experienced accountant can make sure that you choose a reliable payroll company, collect the proper paperwork from employees, and oversee the payroll process.
- You haven’t paid taxes this year: Most businesses pay taxes throughout the year, but estimating payments can be difficult if you don’t understand your company’s financial statements. Contract an accountant to handle tax reporting and payments, and lower the chances of being audited at the same time.
- You spend too much time crunching numbers: From handling day-to-day operational tasks to developing forward-thinking strategies, startup founders and business owners tend to get pulled in many directions at once. The moment you realize you’re spending too much time crunching numbers at the expense of tackling other critical tasks is the moment you want to hire an accountant.
- Your business is booming: If you start slow, you may be able to handle basic accounting tasks with in-house resources. Once your business is in full swing, however, you need an expert to make sure that your finances are in order before you make an expensive mistake.
- You’re planning to sell your startup: Selling your business can generate a financial windfall, as long as you have all your ducks in a row. Before you get too far along in the negotiation process, hire an accountant to help you run the numbers and make sure you’re getting the deal you want.
How to hire an accountant
No matter the size of your business, you need the ideal accountant for your company. Follow the steps below to assess your company’s needs, seek candidates, and help you learn how to hire an accountant.
Understand your needs
Like many professionals, accountants specialize in many areas. Before making a hiring decision, figure out your needs so that you can be selective when making a hiring decision:
- Public accountant: Also known as CPAs, certified public accountants can handle your business’s public records. These professionals file tax returns, help with tax planning, and give advice to your company about employee compensation.
- Tax professional: These accountants specialize in handling tax-related matters. They can file your returns, make tax payments, and communicate with the IRS on your behalf.
- Auditor: These professionals analyze your company’s financial records and help you find ways to streamline your operations and cut costs. Auditors are experts at efficiency and accuracy.
- Management accountant: If you’re seeking a strategic partner, you need a management accountant on your team. These professionals use their expertise to guide your company’s financial performance and can also optimize internal costs.
Know what you can afford
Cost is a common reason that many small business owners avoid hiring accountants, especially in the early stages of a company. The more time you waste crunching numbers, however, the faster you realize that accountants can easily pay for themselves. However, you shouldn’t spend more than necessary for a high-powered accountant if you need only a part-time contractor for simple tasks.
Full-time accountants come with a competitive salary, but part-time accountants may be open to a number of compensation options. Some charge a standard hourly rate for tasks, while others have a set fee for tasks such as filing tax returns. Still others charge package rates for a suite of services such as handling payroll and producing financial reports. Before making an offer, know how much you can afford and make sure that you’re getting a package that meets your needs when you hire an accountant.
Search for the right qualities
Although accountants have a range of specialties, the best candidates have a few key qualities.
- Communication skills: You’ll be depending on your accountant to complete high-level tasks such as analyzing financial statements and filing tax returns. Make sure any candidate you choose can communicate findings and concerns in a way you can understand.
- Attention to detail: A misplaced receipt or a couple of transposed figures can make a big difference on your financial statement. Ensure that your accountant has flawless attention to detail so that you don’t have to worry about mistakes down the road.
- Creativity: Accounting may seem like a straightforward field, but financial experts have to be creative to solve many small business owners’ problems. Look for an accountant who is resourceful and can think outside the box.
- Integrity: You’ll be placing an immense amount of trust in any accountant you hire, so you need to find a candidate who’s reliable. Seek out an accountant who demonstrates impeccable honesty.
- Sense of ethics: The best accountants have a strong sense of ethics. When you hire one of these candidates, you can rest assured that your accountant is trustworthy and that your new hire will strive to make the right legal choices for your business.
Consult with your network
No matter what your company’s needs are, a fellow startup founder or another small business owner in your industry may have already identified a superstar accountant. Since many small business accountants and auditors generate much of their business by word of mouth, don’t hesitate to ask your network for recommendations.
Check with colleagues at your shared office space or ask around at your next networking event. With the right recommendation, you could connect with the ideal accountant for your company and be able to pay it forward in the future.
Whether you need a hand balancing your company’s budget, filing your business taxes, or developing a long-term financial strategy, an expert in the field can help. Hire an accountant and build the skilled team that your business needs to succeed.