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When and Why Your Small Business Needs an Accountant

When it comes to getting off the ground as a startup or small business, your profit margins and expenses are typically at the top of your mind. Oftentimes, small business owners get stuck working in the business instead of on the business, such that the expenses, budgeting, and overall cost of owning a business become the only things they focus on. Instead, you should have the freedom to develop ideas, marketing schemes and company culture. A small business accountant solution could help you arrive there more quickly.

Let's explore what hiring your first accountant should involve, including what skills to look for, costs to consider, what small business accountants can do for you — and when the best time is to hire a financial advisor.

What's the best time to engage a small business accountant?

For most small businesses, saving money and utilising the cash flow you have is essential. However, the biggest question you should ask yourself is: What is the best use of your time? Even if you do your own accounting, it's easy to get distracted by the many tasks and responsibilities that bombard you every day.
As you multitask, there is also the chance of making errors along the way, such as a calculation error or a missed transaction. Although accounting software can help with some of these issues, maintaining the software can easily get expensive or offer more features and modules than you need.

Similarly, if all or most of your efforts are used to track your expenses, other departments in your business will likely go unchecked. The rest of your business could be negatively affected without accurate accounting services.

Other challenges small businesses face could include:

  • Managing receivables: If you're not keeping track of your receivables as your business performs its services or produces products for customers, you may run into problems with not getting paid for the work you're doing in a timely manner.
  • Payroll management: Small businesses don't typically have an HR or payroll department. Sufficient and timely payroll could be the difference between hiring great talent and not getting off the ground at all. If your business gets paid for the work it produces, your employees expect reciprocal payment for the work they're doing to keep the business running.
  • Maintaining payables: While getting paid from your accounts is important, you also need to maintain a steady flow to pay back your vendors. Without a cadence of payments flowing out of your business, you could disrupt your supply chain and hurt valuable business relationships.
  • Tracking expenses: When tax season rolls around, you want to ensure you have the most up-to-date information on the books for smooth tax preparation. Not only is keeping track of every expense extremely detailed, but you could also end up paying too much or missing out on helpful deductibles.
  • Reconciliation: Closing your books for the year can be daunting, knowing that there are many mistakes you can run into along the way. Inaccurate financial records can quickly become problematic if you're showing your reports to a board of investors or lenders.
  • Fraud: If your books are inaccurate, or no one is keeping a close eye on the payroll for consistency and transparency, you could run into fraud cases. A financial audit due to fraud is the last thing your business needs.

The best and easiest way to resolve these common accounting challenges is by hiring an accountant you can trust to handle the details of your finances.

How can an accountant help your small business?

Accountants are advisors who not only manage your taxes and the challenges detailed above but also provide critical insights that help boost revenue and streamline costs. From setting up efficient cloud-based accounting systems to handling intricate payroll structures, and helping with business planning, accountants ensure your financial operations run smoothly and that you reach your business goals.

Working with an experienced accountant makes them a key part of your team. They help you navigate financial challenges with custom advice and strategic planning. They provide solutions that improve your business's cash flow, optimise spending and ensure that your financial decisions are based on solid data.

For more detailed information on specific financial topics, check out our articles on Payroll tax: All you need to know and Fringe Benefits: A comprehensive guide. For personalised advice, however, consider consulting with a professional small business accountant who can help you apply these concepts effectively.

Working with an accountant means you can focus more on growing your business while they take care of the financial details, providing clarity and confidence in navigating your business's financial needs.

Considerations when engaging an accountant

When you're looking to hire an accountant for your small business, it's crucial to pick someone who aligns well with your needs and challenges. Here are some key factors to consider:

1. Qualifications and experience

Make sure your accountant is certified by a reputable organisation. Experience matters, too, as a seasoned professional will bring valuable insights and reliability that can help steer your business through complex financial landscapes.

2. Industry knowledge

It's beneficial to choose an accountant who understands your industry's specific challenges and standards. They'll be more equipped to handle sector-specific issues and help you capitalise on industry-related financial opportunities.

3. Cost-effectiveness

Consider how much you can afford to spend on accounting services. It's important to find a balance between cost and the value an accountant brings to your business.

4. Doing it yourself?

While handling your own finances might seem like a cost-saving move, the complexities of tax laws and financial reporting often mean that professional help can actually save you money in the long run by avoiding costly errors and optimising your financial strategy.

Choosing the right type of accountant — someone who offers more than just bookkeeping and can act as a financial advisor — can make a significant difference in your business's success.

The difference between bookkeeping and accounting

As you're researching accounting professionals, you may come across the term "bookkeeping." Some companies use accounting and bookkeeping services interchangeably, but the type of professional work you're buying into does differ based on their title.

Bookkeepers focus primarily on keeping track of and organising financial transactions. They keep complete records of all of the money that flows in and out of your business. Their records allow accountants to do their job.

An accountant subjectively examines your financial data and what that could mean for your business. A good accountant can perform the duties of both a bookkeeper and an accountant. While the costs differ, hiring an accountant who can perform both tasks necessary to run your business can result in savings.

The advantages of engaging an accountant

As you determine whether you want to engage an accountant, examine the advantages of hiring one. They can help you carry out several vital tasks for your company, such as:

  • Preparing and lodging the business's tax return.
  • Providing financial efficiency advice.
  • Keeping track of your cash flow.
  • Offering advice on tax planning.
  • Putting together a financial strategy.
  • Preparing financial statements in accordance with accounting principles.

Accountants help you keep your overhead costs down and can make predictions for what's to come financially in your business by preparing a budget. From materials necessary for your office, the office space itself, payroll, computer and software, and so much more, there are an entire host of expenses to manage and predict. Your accountant keeps track of it all and offers advice on where to best spend your money.

Woman sitting at a desk

When is the best time to switch to outsourced accounting services?

Every small business owner should consider hiring an accountant before they actually need one. Because accounting services are so vital to the health of your business, the minute you start to feel overwhelmed by your finances is the best time to hire an accounting firm. However, hiring one at the wrong time could slow down your processes.

Here are a few opportune times to hire an outsourced accountant:

  1. At the beginning of the fiscal year, ensure you start on the right foot.
  2. At the end of the month, with newly reconciled bank accounts and a fresh set of financial records.
  3. After your last accountant put in their notice.
  4. If you notice you may be paying too much for an in-house accountant.

Outsourcing your accountant can help you keep your business agile no matter what economic or societal changes occur around you.

If you're searching for ways to improve your cash flow, while creating more efficiencies around your expenses, Wilson Porter can help. We have all of the expertise you're looking for — from payroll to business development — that can help your company thrive. Focus more on improving your business through stellar customer service or marketing, rather than spending your energy on financial details.


When do you need an accountant?

You might need an accountant at various stages, such as during startup, tax season or when you're scaling your business. It's especially crucial when financial tasks start taking too much of your time away from core business activities.
How can an accountant help your small business?
An accountant can manage your taxes, improve cash flow, optimise expenses and provide strategic financial advice to grow your business.

Why work with a small business accountant?

They bring specialised knowledge that can prevent costly mistakes, save money on taxes and offer tailored financial strategies that align with your business goals.

How much does it cost to hire an accountant?

Costs vary depending on the complexity of your needs and the specific services you require. They could typically range from hourly rates for specific tasks to monthly retainers for ongoing services.

What should I consider when hiring an accountant?

Look for qualifications, experience in your industry, the range of services they offer and how well they understand what your business needs.

What type of accountant is best for small business?

An accountant who is a member of an accounting governing body such as a Chartered Accountant.
Can I do the accounting for my small business?
While it's possible, professional accountants can often save you time and money by handling complex financial issues more effectively and avoiding potentially costly mistakes.

Final thoughts

The growth of your small business depends on finding the right accountant. An experienced and knowledgeable accountant can help you handle and make the most of your money and give you business-building advice that moves it forward. Accountants are very important to the growth and security of your business because they help you save money on taxes, make sure you follow the rules and improve cash flow.

Keep in mind that the money you spend on an accountant is an investment in the health and success of your business. If you hire the right person, you can focus on what you do best, which is running your business, while they take care of your paperwork.

Find out more about our services for small businesses to see how our custom financial solutions can help your small business. We can help you make smart financial choices that will help your business grow.

Contact a Wilson Porter professional today to get started.