Signs you need to hire a small business accountant

Unless you run an accounting practice, there is a very good chance that you didn’t start your business with hopes of filing T2s and managing your basic accounting program. You could be missing out on big accounting insights that only an expert financial professional can glean. Be on the lookout for these six signs that you should hire a small business accountant.

1. Your small business is booming

One of the best times to be a business owner is when you’re growing. Finding additional revenue streams or watching existing streams become revenue rivers is exhilarating. However, with increased revenue comes increased accounting obligations, like taxes. Small business accounting services can help you grow, and manage your growth, whether you’re experiencing a steady, continuous climb, or you’re in the midst of an overnight explosion of sales.
To a small business owner, growth can be hypnotizing. A growing business may boast more sales revenues, but what about the behind-the-scenes factors at play? More sales revenue usually means a higher cost of goods sold (COGS), and more payroll and tax. Professional small business accounting services can help you forecast revenue, find projected cash flow, avoid unnecessary tax burdens, and help you successfully and wisely spend your revenue in investments so your business can continue to boom.

Plus, an accountant can also caution you about harmful business purchases. Their reports could prevent you from making a regrettable investment. Increased sales with their increased variable costs to your business may turn out to be not much of an increase after all. Accountants can help you run ratios that show you if your boom is truly a boom, or just feels like it.

2. You’re launching a startup

Getting off to a good start can make or break your small business. Because your early financial choices can echo well into the future of your company, many small business owners hire an accountant to serve as an expert adviser and to guide key financial decisions. An accountant can help you choose between the types of business structures, which determines how you file and deposit taxes, and can also guide you in your hiring processes. In the early stages of your business, you may not need to have full-time employees. Perhaps contractors would work better? That decision alone can create a massive difference in your projected budget and payroll structure. In fact, it’s the difference between having and not having a payroll! No matter what you choose, an accountant will make sure you adhere to those not-so-subtle government regulations meant for your chosen business structure and type of worker. This is important since breaking tax code and business regulations can result in hefty fines that your cash-strapped startup may not be able to cover.

3. You’re creating a business plan

One of the major benefits of a business plan is how it can help you raise and secure capital for your small business. However, if you don’t know what investors or banks are looking for, you might not include the key information they want to see. Since many investors, and certainly banks, will have their own accountants advise them before they inject money into your business dreams, it’s wise to have someone on your team who speaks their language. This is where an accountant can really help your small business.

Your business plan will include financial reports and projections. A good business plan will talk about your potential return on assets (ROA), your planned use of profit, projected operating budgets, and many key financial ratios. Depending on the nature of your business, some of those ratios will matter more than others. An accountant can help you create, understand, and present your business’s financial figures in an accessible and confident way.

4. Taxes are a mystery to you

A mistake on your taxes could mean fines, audits, and possibly the end of your business. IRS penalties are costly, and if you’re not familiar with business tax codes, you also could overlook small business tax deductions that increase your refund. If taxes are a mystery to you, an accountant can help you make sense of it all. They can also help you estimate, file, and deposit taxes for you. Spending money on a good accountant means you run less risk of missing a payment to the government, or missing out on a chance to receive one from them.

5. You are being audited

When CRA audit red flags arise from bookkeeping errors, you could be in financial and legal trouble. If your company gets audited, all your financial history is exposed. A small business accountant can review your financial records and make sure they are accurate and up to code. Then they can check for missing information, reconcile accounts, and run reports that demonstrate your compliance.

6. You’re considering investments

What is depreciation going to look like on your income statement at the end of the year? When your business is ready to expand and purchase new assets, like equipment or a building, an accountant can help you decide how you’ll depreciate those assets over time in order to make get the maximum tax benefit against your investment. An accountant can also help you decide where to purchase your assets, as some states and localities may offer key incentives or tax credits as an investment inducement. Accountants aren’t financial planners; the role of financial planners is more tactical and involves giving you the pros and cons of possible investments. Another way to put this is, accountants can “run the numbers” for you to help you understand the value of an investment, both on the front end and over the projected life of your business. This kind of business understanding is key for strategically growing a sustainable business.

10 reasons your small business needs an accountant

One of the most exciting things about managing a small business on your own is the ability to be in control of every operation. However, as the business grows, it can be a bit daunting to juggle multiple roles. This is why you need the help of an accountant. Here are the top 10 reasons why the expertise and knowledge of an account can be invaluable to your company:


1. Creating a Business Plan
Trained to use special types of accounting software, an accountant is capable of adding financial projections and other reports fast and efficiently. This means that if you involve the help of a professional accountant, you are assured of getting a business plan that will increase the likelihood of business success.
2. You Need Help With Your Finances
Unless you have the necessary skills and knowledge, doing accounting on your own can complicate things for your business. You may end up losing control of your debtors and creditors or make costly financial mistakes. Hiring an accountant can help you get back on track.


3. Taking on a Franchise
Buying a franchise is one of the most effective ways of starting a small business. This is because the franchise company gives you the opportunity to be your own boss and gives you all the relevant marketing, sales, and brand support you can possibly ask for. A professional accountant will help you confirm the validity and sustainability of a franchise as well as the possible related charges and income.
4. Buying and Selling a Business
To get into business, you can either start a company from scratch or buy an already established business that’s up and running. If you are thinking of buying an existing business, it is important to consult an accountant. The accountant will go through the company’s accounts and make sure that everything is in order.
If you have been running your business for years and would like to sell it due to one reason or another, you will also need the help of an accountant. The accountant will help you put your financial records in order and create clear statements of accounts to show prospective buyers.
5. Guidance on Your Company’s Legal Structure
Every business has its own unique business structure. Whether you are running a limited company, a limited liability partnership, or a private business, you should look for an accountant to explain to you the legal structures of the business and help you choose wisely.


6. Auditing
As a requirement, your business may need to be audited once it gets to a certain size or turnover. Since auditing is stressful, expensive, and time-consuming, you should hire an accountant to help you go through the experience smoothly. He will guide you adequately through the auditing process and make sure that you comply with all the relevant audit laws.
7. Dealing with the Government Requirements
As your business expands, you will have to deal with plenty of tax and regulatory paperwork. You need to hire an accountant to help you comply with all tax and regulatory requirements.
8. Applying for a Business Loan
When banks or other financial institutions lend money, they are interested in knowing how they’ll get their money back. An accountant can convince any financial institution that you have the ability to repay the loan by presenting relevant figures and projections.
9. Delegation
The more your business continues to grow, the more you focus your mind on how to take it forward. Hiring an accountant to manage some of the financial elements gives you more time to concentrate on other business operations.


10. Business Growth
If your business is growing at an unexpected rate, you need an accountant to help you deal with all growth transitions. These include hiring more employees, looking for a bigger office space, and market expansion.
Give us a shout today: 587-754-2910