Knowing when it is time to hire a professional accountant.
If you run your own business or are part of the gig economy you may be wondering if it is finally time to hire an accountant. What are the signs that it is time to hire a professional and why would you want to? Professional accountants can do more than just your taxes – they can help your business or startup with insightful financial guidance and planning. Whatever your growth phase, they can help in handling business audits, advise on company structure and tax deductions, and assess any loan applications before they are presented to a bank.
Why hire a professional?
Hiring a professional accounting firm or individual can be of tremendous value; however, they are not all created equal. Their services, certifications and experience can vary a great deal. For example, Certified Public Accountants (CPAs) deliver a higher degree of accounting expertise than an accountant. CPAs need to pass a set of exams and meet licensing requirements of the state(s) they operate in. Their education is ongoing, learning about changes in the tax law or in new regulations. CPAs regularly provide business and tax advice, as well as accounting and recordkeeping services. CPAs also provide their clients a layer of protection during an audit by being certified to represent their clients during a tax audit. Average accountants are by default recognized by the IRS as “unenrolled preparers”, meaning they can’t represent their clients in the event of a tax audit. Not every accountant is a CPA, but every CPA is an accountant.
When do you hire professional accounting help?
If you are starting a business, it’s a smart move to consult with a CPA first. You want the money invested at this point to have a high ROI down the road. A professional CPA will help you avoid the pitfalls of missed accounting and tax filing requirements for the lifetime of the company. They can help advise on how to structure your company: As a Limited Liability Company (LLC), S Corporation (Subchapter Corporation) or C Corporation ( C Corp) in order to obtain the maximum tax advantage. They can even help review your business plan to see if there are any financial holes that need to be addressed.
As your company or practice grows, you may want to spend more time with your accountant to do further analysis and planning. This is especially useful when you are applying for funding from a bank, investor, or grant. A professional can help you get all the financials in order for a successful presentation. CPAs normally have relationships with the Small Business Administration and their network of banks. This can go a long way in successfully funding your business.
Making sense of and for your business
The main reason people in business don’t hire an accountant is the cost. Let’s look at that for a minute. If you are not an accountant yourself, you are doing something that you are not an expert at or like doing. You didn’t go into business to do accounting. Your business is your business. You should be doing what you are expert at. Let the accounting professional do what they are expert at. The number one reason entrepreneurs overpay on taxes is because they didn’t have their professional accountants to formulate a tax plan. This could leave thousands of dollars on the table every year. Free yourself from that responsibility. Your business will profit from it and, chances are, so will the rest of your life.
If you feel that it might be time to hire a professional accounting firm, reach out to us to schedule a conversation at email@example.com.