Should I Hire an Accountant for My Small Business? Wave Blog

To verify that someone is a certified public accountant that can help your company with its finances, go to the CPA verification page. There, you can verify their credentials and track their license renewal dates. There is also free accounting software with unlimited invoicing and mileage tracking features. With these accounting software platforms, you can handle your accounting activities yourself. We’ll show you the benefits of hiring an accountant, how to determine their fees and alternatives to hiring one if their cost is beyond your budget. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice.

Cost Considerations

Get proof of insurance at no additional cost when you need it — no waiting around. “Larger firms generally will have more in-house expertise, better processes and technology, redundancy in the event of turnover, a better commitment to continuing education and more,” he says. Check their standing with the state board of accountancy and verify they have no disciplinary actions. Look for relevant specializations; for example, if you’re in real estate, find a CPA with real estate expertise. John Kinskey, CEO and president of AccessDirect, is a business owner who found significant benefits from retaining a CPA. Depending on how established your small business is, your accountant might become a vital part of your organization as you scale.

You can save money when you hire an accountant by hiring a bookkeeper or doing bookkeeping on your own. An accountant will cost more if they also need to provide bookkeeping services. In case you’re unfamiliar with the difference in bookkeeping and accounting, bookkeepers record daily transactions, and accountants use that information to produce financial models. Bookkeepers do more transactional work, while accounting is more subjective.

Feel confident from day one

They can help you understand your cash flow, identify cost-saving opportunities, and plan for future growth. This level of financial analysis and planning can be the difference between surviving and thriving. While opting to hire a small business accountant will cost you money, it can also save you a lot in the long run.

There’s no shortage of excellent, affordable software options on the market and we’ve done the legwork to research the top choices for you. Check out our reviews of the Best Accounting Software to find one that will work for your needs. You can start a quote, view policy options and purchase coverage in about 10 minutes.

Financial Analysis and Planning

No matter what line of work you’re in, these generalized responsibilities will apply to any small business, whatever stage of development it’s in. Your accounting system is critical for knowing how much cash you have in the bank each evening and if you can meet your expected expenses. One significant advantage of using QuickBooks Online is its widespread adoption by accountants. This reflects the platform’s reliability and efficiency, as it is a preferred choice for many accounting professionals. If you do, and the IRS wants to take a look at your books, then you may need a CPA.

Research potential candidates.

Managing finances effectively is crucial for the success of any small business. It’s important to make an informed decision based on your business’s specific needs, considering factors like cost, complexity of financial transactions, and the potential for growth. Assessing these factors can help you determine whether hiring a small business accountant is the right choice to ensure financial stability and support business growth.

• 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.
• Jason holds a BBA from Simon Fraser University and is a designated CPA.
• Outsourcing can be more cost-effective and provides access to a broader range of expertise without needing a full-time salary.

While the April 15 deadline applies to most annual tax returns, partnerships and S corporations typically file should i hire an accountant for my small business by March 15. The type of business entity you choose determines your tax obligations and liabilities. Each structure carries unique advantages and responsibilities, influencing how you report income, deduct expenses, and comply with tax laws.

Depreciation allows businesses to recover the cost of tangible assets over time. Pass-through entities may qualify for the Qualified Business Income (QBI) deduction, which allows eligible businesses to deduct up to 20% of their qualified income. Partnerships involve two or more individuals or entities operating a business together. They file Form 1065 to report income, deductions, gains, and losses, while each partner reports their share on Schedule K-1. Clear agreements on profit-sharing and responsibilities, paired with detailed records, are critical for smooth operations and compliance.

Data Management

The exam consists of three four-hour Core sections and one four-hour Discipline section, testing advanced knowledge in accounting practices, tax law, auditing and financial reporting. A certified public accountant is a licensed professional who has passed an examination administered by a state’s Board of Accountancy. The CPA designation is a professional credential that requires meeting specific education, work and examination requirements – including holding a bachelor’s degree and completing 150 hours of education. • Preparing annual statements of accounts, financial statements, quarterly financial reports. Your job as a leader is just as important as any job you can delegate to somebody else. Small business owners will usually be excellent multitaskers by nature.

Consider a Certified Public Accountant

• Small business owners, freelancers, and contractors can all benefit from the expertise and attention to detail that a financial accountant can provide.
• This ensures you get the right assistance without the hassle of traditional searches.
• Accounting software systems generate financial reports, but they don’t provide personalized advice.

Running a small business is a demanding endeavor, requiring owners to juggle numerous responsibilities—from sales and marketing to customer service and operations. Amid these daily challenges, financial management often becomes an overwhelming task, especially as the business grows. An accountant can offer valuable insights and strategies at any stage of your business, helping you make informed decisions before small issues snowball into bigger challenges. Many small business owners struggle to get a clear, full picture of their business’s financial health, which can make informed decision-making difficult. Deductions and credits are essential tools for reducing taxable income and liability. Deductions apply to ordinary and necessary expenses like office supplies, rent, utilities, and wages.

Maybe there’s not a tremendous amount of transactions (or there are), but little or none of it is being recorded properly. Do you understand the difference between single-entry and double-entry bookkeeping systems? If you can’t answer these questions, and you feel you should be able to, or maybe some of this terminology has come up in conversation at your business, it could be time to bring in an accountant.