Should I Hire An Accountant For My Small Business?

You should hire an accountant for your small business when you need help with the collection, analysis and reporting of financial information. Accountants can interpret your financial data in order to help you make better business decisions when it comes to your company’s money.

Here’s What We’ll Cover

Do Small Businesses Need an Accountant?

What Are the Duties of an Accountant?

Can I Do My Own Accounting?

How Can I Find a Small Business Accountant?

NOTE: FreshBooks Support team members are not certified income tax or accounting professionals and cannot provide advice in these areas, outside of supporting questions about FreshBooks. If you need income tax advice please contact an accountant in your area.

Do Small Businesses Need an Accountant?

Often you will hear small business owners talking about the need for an accountant at tax time. But business owners can benefit in a lot of ways from the professional expertise of an accountant, who is trained not just to ‘number crunch’ but to analyze the financial data, to report on it and to make recommendations that can result in businesses becoming more profitable.

What Are the Duties of an Accountant?

The duties of an accountant can vary from company to company, but typically they are responsible for:

Data Management

Your accountant would be responsible for ensuring that your financial data is properly stored, updated and managed. This is so the information can be reported on accurately to the business owners, investors (if you have them) and the government. The accountant would also ensure that proper procedures are in place for data entry and that the accounting software system being used is modern, secure and backed up regularly.

Financial Analysis and Consultation

Ever been in a meeting and someone said “how about we get the bean counters in here for their advice before we make a decision?”. There’s a reason for that. When it comes to decisions involving the future of your small business, your accountant may sometimes be your best resource.

Perhaps you need some simple tips on how to proceed with spending in the next quarter, or perhaps there’s a situation regarding a big expenditure and you want to discuss options for credit or tax deductions, or maybe you just need help interpreting some of the financial jargon in a document. An accountant can help you with all of that, as well as troubleshoot the day to day activities of managing the finances of your company.

Financial Reports

Ever heard of a “Cash Flow Statement” or a “Profit and Loss Report”? These are the types of reports that allow you to keep updated on the company’s money. You or your investors are going to be making decisions based on the reports your accountant provides, so he/she needs to make sure they are up to date and accurate.

Regulatory Compliance

Are there lots of rules and regulations affecting your small business? Perhaps your business is going through an audit? Or it’s tax time? Well, an accountant can handle these headaches and ensure that your income and expense reporting follows applicable state and federal laws.

Can I Do My Own Accounting?

Yes, you can do your own accounting for your small business, many owners do just that. But as your company grows, and there is more demand for your time during your working day, you may find you need the support of an accountant. Afterall, an accountant will have a strong background in math and economics, as well as experience with the best accounting practices, procedures, and tools you can make use of. An accountant can also address legal issues, determine financial strategies and generate those much needed reports.

How Can I Find a Small Business Accountant?

Here’s where you want to be very careful and tread slowly. You do not want to rush through the process of hiring an accountant, as this person is going to have access to all your company’s financial details. You want someone capable and trustworthy, and worth the money you’re going to spend. Here’s a checklist on how to find a small business accountant that’s right for you:

Small Business Accountant Job Description

Before you start your search, planning out exactly what you need this person to do is a must. Depending on the size of your business, maybe you just need help with taxes, or maybe it’s just occasional help with categorizing and processing of expenses. Or maybe it’s a bigger job: you need someone to recommend, setup and monitor a proper online accounting system in your office.

Talk to your team, see what their needs are too and draft up a list of responsibilities. If you don’t know exactly where to start, maybe consider hiring an accountant temporarily to come in and assess your needs and make recommendations (some might do this for free just to get the business).

Ask Colleagues About Their Accountant

Chances are you know a few people running their own small businesses who occasionally mention their accountant. Contact them. See who they use and if they’re satisfied with the services being offered. Were tasks completed on time? Were the reports detailed and accurate? Were there any problems?

Consider a Certified Public Accountant

Not everybody is a CPA, but hiring one means you have someone who has passed the tough CPA exam, has the necessary work experience and who will continue to take courses to maintain this designation. Hiring someone who is a CPA is definitely an important consideration.

Check the Accountant’s References

Did a colleague recommend someone that looks promising? Ask for additional references. Book some time in your schedule and give them a call, don’t email them (you’ll get a better sense of a reference’s feelings when you hear their voice). Prepare a list of questions in advance so you don’t get distracted.

Meet Informally

Getting confident you found the right person for the job? Meet a few times, at least once in an informal setting, perhaps for lunch or coffee. You want someone who not only is qualified, but will fit into your organization and get along with you. Explain the ways you manage and see if that works for him/her. Talk about what an average day might look like for this new hire at the company.

Don’t rush into it. You’ll know when you’ve found the right person.

Other Questions Related to When Should I Hire An Accountant For My Small Business:

Are Accountants Financial Advisors?

How Much Does an Accountant Cost a Small Business?

What Is the Difference Between Accounting and Bookkeeping?

Are Accountants Financial Advisors?

Accountants are not Financial Advisors. Financial Advisors recommend investments for clients based on their short and long term goals.

How Much Does an Accountant Cost a Small Business?

Depending on education and experience, you can pay anywhere from $30 – $500 an hour for an accountant. That’s quite a range, but to drill it down to a final price you need to consider the type of work required, the amount of work to be done and the level of responsibility this person will have. Some small businesses require only basic accounting help and that should be reflected in the price paid. It’s best to list out in advance exactly what your needs are, review it with your team for input, and when you find someone you like, quote it out first and see if there is room for negotiation.

What Is the Difference Between Accounting and Bookkeeping?

An Accountant is in charge of assessing and interpreting the financial data of a company, and for reporting on those numbers. A Bookkeeper assists the company’s accountant by handling the actual recording of the financial transactions. A Bookkeeper’s role has evolved over the years due to the advances in digital technology that no longer require as much manual entering of information. Today a Bookkeeper would assist with, recommend or train other employees on these digital tools.

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