When should you hire an Accountant?

The one time of the year that everyone dreads no matter their profession, is tax time. For business owners, this time of the year can be even more stressful. Balancing your day-to-day operations, while trying to stay financially organized and in compliance with ever-changing regulations, is becoming increasingly difficult. It might be time to hire an accountant.

One of the easiest ways to mitigate the headache and time consumption entailed when dealing with your finances is to hire an external accountant or advisor. Generally speaking, most small business owners do not yet require an in-house accountant to handle their finances. Therefore, many opt to hire an external accountant to accompany them on their business journey.

One of the most common questions we receive is “when is the best time to hire an accountant”, and the genuine answer varies depending on your individual circumstances. The beauty of hiring an external accountant is that you can utilize them for the services that you need when you need them.

Below are instances in which we see clients approach us:

When starting a new business

One of the most common phases that individuals opt to hire an accountant is during their business formation process. Working with an expert can help you save time, money, and get yourself set up the right way, from day one. They can help you:

  • Choose the correct business entity type (e.g. LLC, a sole proprietor, partnership, etc.)
  • Formulate a winning business plan
  • Create an extensive tax strategy from day one
  • Adopt and Integrate the right accounting software for your business
  • Properly Set up your business EIN and complying with state licenses or requirements

In addition to the formation process and all it entails, partnering with a trusted advisor during the startup process gives you the opportunity to hit the ground running, a step ahead of the competition.

When you need help managing cash flow

An accountant can help you analyze your business’s cash flow trends, help you build projections, and assist you in best allocating your business’s funds. We’ve seen business owners that have too much free cash flow (better allocated in strategic investments) as well as owners who need help figuring out where to cut expenses and increase cash flow. A professional accountant can offer you suggestions to improve your financial standing.

When Planning for the Future

Many argue that one of the most important tasks an accountant can help with is Tax Planning. Businesses large and small rely on concrete tax strategies in order to maximize their financial efficiency. Tax planning can help you make better strategic investments and ultimately lower your overall tax liability a much as possible. Without a proper tax plan, you could be significantly overpaying in taxes, or simply not utilizing all of the credits, benefits, and deductions that you are entitled to by law. 

When Feeling Overwhelmed

Running your company while dealing with things like bank reconciliations, accounts payable, accounts receivable, running payroll, generating reports, and sending invoices can be extremely time-consuming and cumbersome. While some business owners opt to do their own “Bookkeeping”, many turn to an accounting specialist for the task. While you certainly can do these things on your own, it does not mean that you have to, nor that you should. The indispensable advice and guidance an accountant offer coupled with the increased free time you will have will allow you to take your business to the next level. 

Conclusion

Any business operator that has a good relationship with their accountant will attest to the time, money, and effort that partnership has saved them over the years. Whether it’s bookkeeping and payroll, a long-term tax strategy, or virtual CFO services… The right Accountant can do wonders for your financial success as an entrepreneur. 

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