Accounting solutions for your small business should only save you time and money, not add additional high expenses onto your plate.

When should you hire an accountant for your small business?

When it comes to getting off the ground as a start-up or small business, your profit margins and expenses are typically top of 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 company become the only thing you 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 look like; from what skills to look out for, costs to consider, and when the best time is to hire a financial advisor.

Accounting professionals can help you save money and time for any task.Hiring an accountant can save you valuable time and usually a lot of money.

For most small businesses, saving money and utilising the cash flow you have is essential. The biggest question you should ask yourself, however, 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 in keeping up with tracking your expenses, other departments in your business will likely go unchecked. Without accurate accounting services, the rest of your business could be negatively affected. 

Other challenges small businesses face could include:

  • Managing receivables: As your company performs its services or produces products for customers, if you're not keeping track of your receivables, you may run into problems with not getting paid for the work you're doing within 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.

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 takes a subjective look at your financial data and what that could mean for your business. A good accountant can perform the duties of both a bookkeeper and accountant.

While the costs differ, you do end up saving more by hiring an accountant that can perform both tasks necessary to run your business.

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:

  • Getting your business taxes ready and filed.
  • Providing financial efficiency advice.
  • Keeping track of your cash flow.
  • Offering advice on tax planning.
  • Putting together a financial strategy.
  • Creating certified financial accounts and auditing your company's books.

Accountants help you keep your overhead costs down and can make predictions for what's to come financially in your business. 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.

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, as soon as 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. Beginning of the fiscal year to ensure you start on the right foot.
  2. At the end of the month into 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, hire a Wilson Porter accountant. 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. Contact a Wilson Porter professional today to get started.