In the world of small businesses, no one wants to increase administrative overhead until it becomes absolutely necessary. When you’re trying to kick-start your venture, you really only want to direct your resources towards efforts that add to the company’s growth. So most small business owners tend to manage tasks like bookkeeping and accounting on their own, at least in the early days. But we all know that sooner or later, the time will come when it will no longer be advisable to go on without some professional assistance in those areas. If you’re trying to decide whether you’re ready to hire an accountant, keep an eye out for these warning signs:
1. You need to deal with Uncle Sam
Or your state or municipal government. It makes sense to make a DIY project of your bookkeeping when you’re getting started. And for some period of time, you’ll be able to rely on the help of family members, or divvy up assorted financial tasks amongst your staff. That may be good enough for a while. But as soon as it’s time to file your tax returns, it’s probably time to rethink things. Tax codes can be complicated and confusing, and documents (and payments) that you need to file with the government are not the place to make mistakes. Having an accountant handle government matters is the best way to stay in compliance, and maintain some piece of mind.
2. You’re a lot busier than you expected to be
For a young company, getting really busy is general good news, and we hope it means that you’re getting lots of new business. But for you as the owner, it means that you have to start being more selective about where it’s best for you to spend your valuable time. Generally your own priorities need to be refining your offerings, and bringing in more clients. Getting bogged down with bookkeeping can’t really fit into the business plan any longer. Letting a professional accountant take over that workload will allow you to reclaim your time, which will be much better spent in other efforts.
3. You’re not an accountant
We don’t know what your business is yet, but we’re assuming you're not in accounting, or else you probably wouldn’t be reading this blog. It may not be rocket science, but there is quite a lot to know about accounting. You can start keeping your ledgers and records on your own, but as your company grows, it’s going to get more complicated. If you’re not comfortable producing reports and projections on your own, hire an accountant and avoid making costly errors.
4. You feel like you’re losing control of your finances
If your revenue is increasing, but profits aren’t, you need to do some analysis in order to determine where you can make adjustments. If you can’t keep track of who owes you money, you’ll need to put some systems in place so you can stay on top of your receivables. An accountant can help you get some perspective on financial matters like these, and implement systems that will keep things running efficiently.
5. You’re getting audited
We all cringe at the thought of this one. We could have included it in #1, above, but it’s really a separate, and scarier issue. If you’ve been called for an audit, and you don’t have an accountant yet, you need one now. Chances are that things are going to get a bit tricky at this point. An accountant who knows the tax regulations inside and out will be able to guide you through this troubling process and help you keep your stress level down.