Warning signs that you need an accountant
June 27th 2019 | Posted by Dave Cross
Warning signs that you need an accountant
As a progressive business owner, you probably thrive in a DIY environment, but the more hats you wear, the less you’ll accomplish.
Accounting is one of the most critical areas for keeping your company profitable as you start and your company grows. Many people put off hiring an accountant because of the perception that they’re too expensive, but having an accountant can save you a lot of money in the long run and provide serious peace of mind.
Here are some key factors when hiring an accountant makes good business sense:
When writing a business plan:
When writing a business plan look for an accountant that has experience in the same sector as your business. Someone who knows the nature of your business can help you put together realistic financial projections. They can also give you specific advice to get you on the road to profitability much faster.
Selecting a legal structure for your business:
Corporations, LLC’s, limited companies, limited partnerships; they’re all different in terms of how they are taxed, whether or not they protect your assets and how complicated they are to set up and maintain. An accountant can help you figure out which structure will best suit your needs.
When hiring employees:
Make sure to talk to an accountant about the differences between contractors and employees, so you follow the employment laws in the right way. They can also help you set up your payroll system properly.
When your lender requests a financial statement:
At some point, your company will probably require additional funding whether it’s for new equipment, purchasing property, expansion, or for establishing an emergency fund. Before you contact a lender, having an accountant that prepares a financial statement can increase your chances of getting approved.
When your business is in the growth phase:
As your company expands, it is a clear indication to hire an accountant that will maintain the records of all the expenses, income, and deductibles. This way, all the finances will remain in focus.
When your budget is falling short:
Not meeting budget goals can reduce the chances of your business survival. Having an accountant on-hand to analyse your budget assists in making changes and catch errors, and it will help you make sure your budget is on target for success.
When you don’t know about taxation, auditing and accounting jargons:
Many successful business owners do not know anything about accounting. An accountant can take a lot of the stress out of filing your taxes. He can also help you get through an audit and keep your business in compliance with all the regulations that apply. These can include guiding you through what to do when a partner joins or leaves the company or what to do when you decide to sell stock.
When you don’t have time to focus on your work:
An accountant allows you to focus on your work. As a business owner, you don’t have time for tasks that don’t involve growing your business. Having an accountant helps you run things smoothly and allows you to focus on what you do best.
Choosing or setting up new business software:
The right accountant will be able to recommend software for all your business needs. Hiring an accountant who can set everything up properly from the beginning will save you from the expensive hassle of having to clean up any mess later.
Questions to consider when hiring an accountant:
- Does your business planning match your financial forecasting?
- Have you read the tax codes?
- Do you have enough time to take care of all the accounting operations?
- Are you sure your employees are classified correctly?
- Do you know how to make a financial statement?
- Is your budget working for you?