If you’re just starting your business, you’re likely experiencing a crash course in business accounting to manage your the books. And unless your business offers small business accounting as a service, there’s a good chance you’re not an accountant. But that’s OK! You’re probably actually doing a decent job—especially if you’re using a certain awesome accounting software app!
But what happens when your business moves out of bootstrapping and begins to grow? How do you answer the does my business need an accountant? question? Here are a few indicators to keep an eye out for…
When Taxes Get Complicated
Honestly, when you’re running a business, taxes get complicated pretty quickly. Hiring an accountant to handle your taxes not only saves you vast amounts of time and energy, it also offers a level of comfort and support if you get audited. (Read about a small business owners’ closest allies.) Without an accountant you’re likely missing deductions as well, so an accountant might actually save you money.
Change To Business Structure
If you’ve been a sole proprietor or freelancer you may not have set up a corporate structure, opting to accept payments using your social security number. However, if your business is growing, it will likely make sense to set up a business entity for your protection. Consequently, setting up a business entity also entails tax obligations—and it can get pretty complicated figuring out which route is best. An accountant can help guide you through that process.
When It’s Time To Hire
The good news: your business is growing and it is time to do some hiring! The less-than-good news: the accounting aspects of hiring aren’t all that easy to figure out. An accountant can help you with the processes and paperwork it takes to bring on independent contracts (known as 1099s in the U.S.). He or she can also help you understand what full-time hiring, payroll and related costs look like. (Hint: as the business owner, it’s going to be more than just about employee salaries.) An accountant will help you navigate the perils of payroll tax obligations and more.
Creating A Business Plan
Say you’ve created a business plan for your company to help it get to the next level. One of the biggest parts of a business plan is the financials. (After all, if you’re taking on business partners or investors, that’s what matters most!) Alas, an accountant can help with business planning. They can review your strategy and offer solid advice on everything from cash flow to inventory management to pricing as well as offer guidance about how to grow your business the right way.
If You Need A Business Loan Or Credit Line
Sometimes you need a cash infusion to help your business grow, and an accountant can make all the difference. Not only will an accountant be able to help you fine tune the paperwork to perfection, but they will also reassure the bank that your business is worth the investment. And before you even get to that point, an accountant can also give you guidance on which loan is best for your business.
Hiring an accountant can help you run your business more effectively, guide you through the growing pains, and have your back should things get sticky. You’ll find the dividends of using an accountant far outweigh the expense in the long run.