How Do I Know If I Need An Accountant?

Just like finding yourself a lawyer and a banker, finding an accountant is one of the things that should be routine when you first set up your business.

Guest Post by Evan Birch, Accountant at Bench Accounting

Do I need an accountant? How can I find a good one? And how much will it cost me?

We field these questions a lot here at Bench, and the answer we give is simple: if you’re in business, you definitely need an accountant. Cash is going to be the lifeblood of your business, and you need to know someone who can help you handle it.

If you haven’t hired an accountant yet, or if you’re trying to find a good one, read on. We’re about to help you determine when to hire an accountant, and how to find one who’s right for your business’s needs.

When do I need to hire an accountant?

Just like finding yourself a lawyer and a banker, finding an accountant is one of the things that should be routine when you first set up your business.

Even if you don’t think you’ll need to use their services frequently, it’s still a good idea to connect with an accountant early on so that you have someone to go to as soon as any financial questions arise.

If your business is already up and running but you haven’t connected with an accountant yet, the time to do so is now.

What should I look for in an accountant?

The biggest mistake people make is assuming that they need to hire a large accounting firm right away. Don’t overestimate the needs of your business. You don’t need an expensive firm to service a mom and pop shop. If there’s a smaller local firm that can do the things you need, they’re probably going to be fine.

Make sure that you look for an accountant who’s helpful, happy to answer questions using language you understand (i.e. no confusing financial jargon), and someone you feel comfortable to call and chat with over the phone.

Your accountant is there to advise you on financial issues, and they’re there to make your life easier. If you don’t feel comfortable reaching out and talking to them, there’s no point in hiring them to help you with your business.

How much does an accountant cost?

Small practice firms want your business, so most will offer an initial consultation for free. They’ll probably also sit down with you and help you with some setup work for a fairly nominal fee.

Beyond that, fees differ from accountant to accountant. Where you live will also affect how much your accountant charges you; you’ll pay a lot more for an accountant in New York or Vancouver than you will in Kentucky or New Brunswick.

If you’re in the United States, use the U.S. TaxCenter’s guide to the average cost of tax preparation as a benchmark, and research the fees charged by local accountants in your area before deciding on a fee structure that works with your budget. If in Canada, research the fees charged by local accountants in your area before deciding on a fee structure that works with your budget.

What should I have my accountant do for me?

An accountant isn’t just there to do your taxes. They’re there to help you pick the best legal structure for your business, help get your business set up properly, and explain the best way to do things financially. They can also help you decide what accounting system to use, set up business loans, advise you on the taxes you need to pay, and explain what kind of payroll system and forms your business might need to deal with. Certain accountants can also support you in the case of a tax audit.

While you may not need to hire one full time, an accountant can help you out every step of the way, so you can see why it’s a good idea to have one on hand.

Also, don’t fall into the trap of assuming that your accountant needs to do everything. Often accountants will offer additional services that you may be able to outsource elsewhere at a cheaper rate.

For example, you could continue using FreshBooks to handle your invoicing and expenses, and rely on your accountant to act as a financial advisor for your business.

If somebody else can perform a service for you at a better rate, use them instead. Doing so is a sound economic decision and your accountant should be comfortable with that.

How can I find a good accountant?

First, ask people you know – preferably other small business owners – for referrals. Then, check online reviews to confirm that the accountant or accounting firm you’re considering is a hit with other clients.

Also, services like Bench or Freshbooks often recommend accountants to their clients. For example, you can use the FreshMap to find an accountant familiar with FreshBooks in your area.

Most of the business owners we support at Bench prefer to work with an accountant in their local area. ‘Distance’ CPAs – accountants who work remotely from a different city or state – are okay, but make sure the accountant or firm is set up to handle remote clients.

Once you’ve chosen an accountant you’re happy with, you can often perform a ‘test run’ of their service. They should give you access to their system so you can use it and see what it’s like, without pressure to pay huge fees to trial their service. If it works for you and your business’s needs, it’s a fit.

No matter the size of your operation, if you’re in business there are so many instances where you’ll benefit from the support of a good accountant. Having one on hand won’t just make your life easier come tax time — it will give you access to a valuable long-term partner who can help you grow your business, and deal with any financial issues as soon as they arise.

about the author

FreshBooks is the #1 accounting software in the cloud designed to make billing painless for small businesses and their teams. Today, over 10 million small businesses use FreshBooks to effortlessly send professional looking invoices, organize expenses and track their billable time.