Business owners typically have to wear a multitude of hats when launching their business. Most of the time it just isn’t feasible to hire someone for every job that needs to get done when you first start out.
So where do the tasks of bookkeeping and accounting usually land?
On the business owner, of course! Along with sales, delivery of products and services, marketing, human resources (if you have any staff), networking, and the list goes on and on.
If you have already started a business, then you know EXACTLY what I am talking about!
After being in sales meetings all day, you come home only wanting to relax, but your computer is beckoning from the corner of the room: “Come, turn on my screen, you need to reconcile your bank account.” …or write those three proposals, or finish that client project, or research that new piece of equipment, or, or, or!
If this sounds like your daily life, then I say: Go you! You’re definitely dedicated to your business, and you have totally rocked it out by yourself so far! Maybe you don’t own a business yet, but are looking at starting, or buying one.
Either way, it’s a good idea to check out these “5 Signs it’s Time to Hire an Accountant”.
You’re starting a business
There are many facets to starting a business that need to be taken into consideration. This is the primary purpose of creating a business plan. You need to know what to expect, how you plan to build your business, at what point do you need to add help, what will be your break-even point, etc. While you won’t need full-time in-house staff right off the bat, you should consider outsourcing your accounting to ensure you’re taking everything into account that you need to. Additionally, I can’t stress the importance of getting set up the right way from start - it will save you countless hours and dollars in fixing it down the road.
You’re going for a business loan
Many times when a business is in start-up mode, the owner has the need to take out a loan from the bank, or find investors, to get rolling. Or, perhaps you need a loan in order to make a large equipment purchase, rent space, or create a financial cushion for your existing business. If you need a loan or investors, your business plan and accounting need to be in tip-top shape. Both the bank and investors will want to see that your business is viable, and that they’re not likely to lose money by loaning to you. If you currently handle all your daily bookkeeping and taxes yourself, this is absolutely the time to hire an accountant.
Your business is booming!
Growth in your business is exciting! It also gives you major kudos for doing a fantastic job managing your business on your own so far. While business growth means you’re doing even better financially, it also means more work to be done. Whether you provide products or services, any way you cut it, it means more work.
Even if you haven’t had a big upswing in income, but have gotten far enough along that you need to hire extra staff, then it may be time to hire an accountant. Payroll, payroll taxes and hiring are not areas you want to mess up on! This is the time to take a close look and see if it makes sense to bring in an outsourced accountant or virtual CFO.
You’re buying an existing business
There are some terrific advantages to buying an existing business. As long as the business is properly structured and profitable, you could be acquiring a valuable asset. However, buying an existing business can quickly turn into a liability. This is a time where having an accountant is a necessity. It would also be advisable to contract an attorney to collaborate with your accountant. The attorney will benefit you when it comes to reviewing contracts, and ensuring there aren’t any legal actions being taken against the business that you will inherit by default. Your accountant will be able to not only determine the current viability of the business, but also help evaluate the financial projections.
You’re spending too much time on accounting
Time is money, right? Whether time should be directly equated to money could easily be another article itself, but it is appropriate and applicable when talking about doing your own accounting.
What do I mean?
You didn’t go into business to do accounting. You went into business to do what you’re really good at; what you’re passionate about. You didn’t go in to business to process payroll or create budgets. You have better things to do with your working hours than worry about the accounting. Truthfully, it’s the first thing that’s going to fall by the wayside when you get busy. Wouldn’t your time be better spent prospecting or focusing on your clients?
Don’t worry. It’s okay if accounting just isn’t your thing!
A qualified accountant will be able to get your accounting done efficiently and accurately; which means you will have more time to focus on building your business.
Of course, there are many other reasons you may need to consider hiring a qualified accountant. These are just some red flag milestones to keep in the back of your mind. Using your valuable (and limited) time and energy to manage the financial side of your business can take away from actually building your business.
We get into our professions because we love what we do, and we’re good at it. We don’t go into business to be the manager, marketing guru, or accountant for our office. Know when your time has become too valuable to spend on these other areas and get the help you need. Not recognizing the need for help, is where many companies begin to fail. It’s just not feasible for one person to do everything forever!