When Do You Need to Hire an Accountant for Small Business?

If you own a small business, you probably do a lot of the accounting and bookkeeping work yourself. You take care of tax planning, keep track of your expenses and sales, and you prepare your financial statements. But the time may come when you can no longer keep up with the job. At that point, you’ll need to hire an accountant.

Many small business owners are reluctant to hire accountants due to cost or control concerns. However, a recent study from Intuit (creator of QuickBooks and TurboTax) found that 89% of small businesses see more success when working with an accountant

How to Know When It’s the Right Time to Hire an Accountant

There are several signs that it might be time for you to hire an accountant, such as:

How to Know When It’s the Right Time to Hire an Accountant

1.  You’ve Outgrown Your Own Books

If you’ve been handling your own books for some time and you’re starting to feel overwhelmed, it may be time to hire an accountant.

Maybe your bookkeeping system is no longer be working for you, or you may no longer have the time to dedicate to keeping your books. In either case, you’ve outgrown your books, and it’s time to bring in a professional.

When small businesses experience growth, it can be difficult to keep on top of bookkeeping and accounting.

2.  You Would Increase Your Profits by Not Doing Your Own Books

If you’re spending more time on accounting and bookkeeping than you are on your business, it’s time to hire an accountant.

It’s important to remember that your job is to run your business – not keep your books. Offloading these tasks to an experienced accountant means that you can spend more time focusing on core business tasks that lead to growth and higher profits.

Ultimately, it comes down to time and money. Your time is valuable, and every second spent on bookkeeping and accounting is money lost. Hiring an accountant can increase your profits by simply giving you more time to focus on managing and growing your business.

In addition, an accountant can help you find missing tax deductions that may be causing you to overspend on your taxes.

You may find that hiring an accountant saves you money in the long run because you’re able to focus on your business and reduce your small business taxes.

3. You’re Taking On Too Many Business Tasks

If you’re not able to meet your bookkeeping deadlines, or you’re having difficulty preparing your financial statements, it’s time to hire an accountant.

These are signs that you’re taking on too many things at once and it’s time to start delegating tasks.

Many small business owners face this issue when they’re growing or expanding, especially if the growth happens quickly. There are only so many hours in a day and only so many tasks you can handle on your own.

Bookkeeping and accounting tasks eat up a lot of time, especially if your business is growing. An accountant can take on these tasks for you, so you no longer feel overwhelmed.

4. You’re Hiring Employees

If you’re hiring employees, then your business is probably growing. Growth is a sign of success, but it also means that your business is getting more complicated. Along with the management of your new employees, you also have to consider payroll and the tax implications of expanding your staff.

To comply with IRS requirements, you will need to, among many other things:

  • Make sure you’re reporting employee wages and tips.
  • Meet deadlines for paying payroll, Medicare, and Social Security taxes.
  • Ensure all employees fill out a W-4 form with the appropriate amount of withholding.
  • Deposit all withheld taxes.
  • Pay Federal Unemployment Tax quarterly.

Hiring employees is great for business, but as you can see, things can get very complicated, very quickly.

At some point, the process becomes too overwhelming to handle on your own. An accountant can manage company payroll and payment processes to free up your time and greatly reduce the risk of costly errors.

5. You’re Being Audited or Have to Deal With the Government

Tax audits can be stressful and complicated, especially if you’re trying to run your business at the same time. In addition to mountains of paperwork, audits also involve a lot of back-and-forth communication with the IRS.

If you’re facing an audit and you don’t already have an accountant, now is the time to hire one. An accountant can help:

  • Manage the paperwork
  • Identify the documents and information you will need
  • Communicate with the IRS to free up your time

If you deal with the government as part of your day-to-day operations, it’s time to bring an accountant on board. Like with an audit, dealing with the government typically means having to manage mountains of paperwork.

In addition to tax preparation and helping you wade through the paperwork, an accountant can also help:

  • Ensure your business is compliant with tax laws
  • Fill out and file the necessary compliance documents for your company
  • Ensure your status is updated in the government’s company register
  • Prepare annual statements
  • Handle payroll and employee tax codes and payments

6. You’re Planning a Large Purchase

If your business is growing, you may be considering making a large purchase to support your growth. Maybe you need more or new equipment, or perhaps you’re considering expanding and need to purchase real estate. You may be wondering the best way to go about making your purchase. Should you lease, purchase, finance, etc.?

Major purchases will have major implications for your business from a financial standpoint. Having guidance and advice from an accountant can help ensure that you make the best decision for your business.

An accountant can assess your financial situation and advise you on how much you can realistically spend.

These are just a few of the many signs that it’s time to hire an accountant for your small business. We’ve helped many small businesses with their accounting needs, from tax compliance to bookkeeping, consulting services, and more.

Schedule a call today to find out how we can help ease your burden and free up valuable time.

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