How to Hire an Accountant for Your Small Business

hire an accountant

Small business owners often long for the day they can focus on running and growing their companies. Hiring a part-time accountant or even a full-time accountant depending on the workload could be the solution. It may be the only way to break free of the necessary financial paperwork that is putting constraints on your time.

Hiring an Accountant for Small Business

Here’s a snippet of tasks that an accountant can take off your plate:

  • Quarterly and annual tax filing
  • Providing financial documents for loan and grant applications
  • Acting as financial advisor
  • Doing payroll
  • Handling invoicing and tracking payments

Why You Should Consider Hiring an Accountant

Why do small businesses need an accounting professional? Here are a few good reasons why a small business owner needs an accountant (and not just for tax season).

Perfect Financial Statements and Financial Records

Using a professional to prepare financial statements means that you’ll be able to get a snapshot of your company’s financial information at a glance. Without the capability of doing regular financial analysis, you may lose sight of your goals and stray from your plans.

Keep with Tax Laws and Maximize Tax Savings

When you’re busy running your own business, the business accounting duties may be pushed to the side. A good accountant can help you with tax planning, making sure you get tax write-offs when it’s time for filing taxes. Certified public accountants will also keep your business in line by being compliant with the latest tax laws.

Business Management

By working with accounting professionals, you’ll have more time to focus on the daily tasks of running the business, instead of accounting tasks. The right accountant can handle all the required business taxes, with an eye to assisting you with financial planning.

Applying for Loans or Grants

If you want to apply for a grant or a loan, information about the company’s finances is easy to access. Financial Reports and other information about the business’s finances are the responsibility of your accountant, who will produce statements as required. The accountant’s services also lend a degree of professionalism to your company’s reputation.

Audit Representation

Certified Public Accountants and Accounting firms offer an important benefit. You’ll have representation in the event of an audit. In fact, according to data from accounting firms, you’re less likely to be audited if your return indicates your professional relationship with an accountant.

Less Stress

Tax returns? Cross them off your list. Accuracy of your bank account? Draw a line through that one too. Hiring someone with extensive knowledge of the financial end of your business will help you worry less and focus on your company’s growth.

When to Hire an Accountant

Many small business owners put off hiring an accountant until it becomes painfully obvious that such services are needed.

During that time, you may be missing out. There may be an accounting system that could be making your life easier. You may need tax advice. You may not have put your financial goals to paper.

If you’re not ready to hire a full-time accountant, consider making a start with a part-time accountant. Many accounting firms offer these services, and you may find that you actually save money.

Remember that the fees you pay an accountant are tax-deductible as a business expense. In fact, you may want to build accounting expenses into your long-range business plan.

Read More: accounting services for small business

How Much Does It Cost to Hire an Accountant?

Costs vary according to the scope of the accounting services you require. Costs also vary by the level of education (certified public accountant with a college degree) and level of experience of the accountant.

If you’re hiring a self-employed accountant as a subcontractor, you should expect to pay at least $40 as an hourly rate. If you’re working with an accounting firm, you’ll pay from $100 to $250 an hour.

How to Hire an Accountant

How do you find that person who has the financial knowledge that’s a match for how your business operates? Financial needs and tax situations vary by company, for example, sole proprietors don’t have the same needs as owners who have employees.

1. List the services you’d love to turn over to an accountant.

2. Network with other business owners to find out which accountants or accounting firms they like, and why.

3. Armed with a list of accounting interview questions to ask, make an appointment. There may be accountants or firms that offer a free consultation.

4. During the hiring process discuss charges including likely fees by task, financial statements, financial reporting, payroll, first tax filing, and any tax issues.

5. If you’re operating a new business, ask for accounting software recommendations as part of the interview process.

Tasks for a Bookkeeper

Typical bookkeeping services include keeping tabs on cash flow. A bookkeeper manages bank accounts, handles invoices and payments, and records transactions such as paying for purchases.

Hiring someone to provide bookkeeping services can be an interim step. It can also ensure that you provide good records to an accountant.

Accountant Vs. Using Accounting Software

There are a number of top-notch accounting software choices. Accounting software can make your tasks easier, and can also make your accountant’s tasks easier.

There are things that accounting software can’t do: A computer program isn’t going to offer advice or give you tips about changing tax laws.

Freelance Vs. Fulltime Accountant

At what point do you need a staff accountant?

In a perfect world, that freelance accountant or subcontractor accountant will become your full-time accountant. You’ll be getting an individual who already knows your business.

You may be able to justify hiring a full-time accountant when you would be adding tasks. For example, you’re going to hire employees.

Does an accountant save a business money?

Yes. You may realize financial savings in the form of tax breaks you weren’t using, or by writing off accounting expenses.

Here’s a way to consider that decision: You may feel that you’re paying an accountant a higher wage than you would pay yourself. But remember, it would take you much longer to do the same work and you’re taking time away from running your business.

Is Hiring an Accountant Worth It?

Yes. Even if you’re only experiencing the stomach clench and headache at tax time. If you get something wrong with taxes, there are consequences. Hiring an accountant or accounting firm will reduce your stress for you.

Image: Depositphotos

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Lisa Price Lisa Price is a staff writer for Small Business Trends and has been a member of the team for 4 years. She has a B.A. in English with a minor in journalism from Shippensburg State College (Pennsylvania). She is also a freelance writer and previously worked as a newspaper circulation district manager and radio station commercial writer. In 2019, Lisa received the (Pennsylvania) Keystone Award.