Should You Hire An Accountant for Your Small Business?
Do you need an accountant for your small business?
Small business owners give themselves many roles. In the early days of a new business launch, it’s often more convenient and cost-effective to cover the daily, weekly, and monthly tasks in your diary yourself. As the business starts to grow, however, the need for staff members increases. Small businesses have many threats, and the majority of those threats are going to be money related.That’s why the temptation to make use of a qualified accountant is common.
Finances are always a challenging thing to balance when you’re trying to nurture and grow a small business, and having an accountant can help make sure that you remain safe. Having the best financial advice about when and if to make that new company acquisition is invaluable, for instance. The following guide will explore the pros and cons of hiring an accountant so that you have a better idea of whether it’s right for you.
What can an accountant do for you?
There are a variety of services that a trained accountant or accountancy firm can bring to your small business. The main aspects that you’re probably most interested in are:
- Account keeping
- Tax Returns
- Interest only business loan applications
- Payroll management
- Updating records
- Making sure that you know when and how to apply for a personal loan
These services can help a small business owner because they help with monitoring expenses, as well as keeping you up to date with all of your government tax payments. An accountant will also bring other skills. Most will be trained in the use of the latest accounting software, as well as being up to date on any new bookkeeping requirements. This knowledge can save you a lot of stress and money when it comes to the end of the tax year.
Paying your Taxes
Small businesses benefit from a wide variety of tax advantages. The chances are that the average entrepreneur is not going to be aware of what they are entitled to and what they are not. Taxes are inevitable, and finding legal advantages can leave you with a lot more money in the bank at the end of the fiscal year. A good accountant will plan their processing so that your business benefits from as many financial advantages as possible. It can also cover your applications for commercial loans and interest only business loans aimed at the small business. Knowing what money you are entitled to is a challenge, but an accountant will be far more aware of the potential options.
Updates and Audits
While this is a process that is normally only reserved for larger and more complex business models, an audit is within the skill-set of most accountants. As businesses evolve and grow, the need for an audit can often sneak up on you. Having an accountant in your team can make sure that you have minimal workflow disruption throughout an auditing process.
Smart business owners want to be surrounded by people that understand their business. An accountant is uniquely placed within a business structure. As a result, they will have a well-informed perspective about where your business currently stands. They can provide you with insights which will cover your plans for the future, and advise on a variety of crucial touch points regarding growth. From financing a business acquisition to adopting a new product or service into your catalog, accountants can be invaluable sources of advice. They will ensure that you are not going to overspend, and will have valuable suggestions regarding the future of your business venture. Having realistic advice from someone who knows the status of your bottom line can be invaluable, and can cover:
- Your marketing strategy – Marketing can either be very cheap or very expensive depending on how you plan to do it. Your accountant can make sure that you do not overspend, and your marketing team will be able to work with them to ensure that your business remains within budget.
- Pricing/Profit Margins – You know what your competitors are charging, and the temptation is usually going to be to undercut them. Having an in-house accountant can help you work out what your profit margins are going to be at every price point, and give you a clearer idea of what you need to charge for your products and services. It is going to be a major factor when it comes to success or failure, and can even help to guide you when it comes to considering a new company acquisition.
- Staff Management – As your small business grows, the temptation is going to be to hire more staff. You may have launched the business yourself, but no entrepreneur is going to want to do that forever. An accountant will not only let you know when you can afford to take on new staff members, but they can also advise you on what you can and should be paying those new members of your team.
- Networking – A much under-considered aspect of taking advantage of the services of an accountant is that they will often have business interests in other sectors. This knowledge can be invaluable for small businesses that want to focus on their networking. Having an access point or an introduction can be much more effective than an unsolicited email.
While every business can benefit from the use of an accountant long before the day they launch, that is often not feasible for small businesses. That’s why outsourcing of accounting services remains a popular option. Not only can this be a cheaper option; it still provide the many of the benefits of a full-time, in-house accountant. There are some cons of outsourcing an accountant though, and you need to be aware of those before you commit to this option:
- Although digital technology has made it easier than ever to communicate and collaborate with remote workers, many small business owners prefer having their employees close. Outsourcing will mean that your accountant is not just working for you. They will have a roster of clients, and that can make it difficult to talk to them when you need to.
- When you’ve been running your own business and are used to making all of the decisions yourself, it can be frustrating to have your ideas shot down. An accountant is the ultimate realist in a business, and as a result, some entrepreneurs feel that they lose some of their oversight and control. The fact is that just by looking at your figures, even a part-time and outsourced accountant will often have a better understanding of your business than you will.
Having an accountant involved in your business is a very positive asset. Whether you opt for a full-time accountant who is dedicated solely to your venture, or you make use of a part-time or outsourced option will depend on your needs. Make sure that you talk to a range of accountants to find the right fit for you and your small business. With the right team, your business will only grow stronger, and your accountant can be the foundation of a more profitable future.