Is it time to hire an accountant? If you’re an SMB, the right accountant can be your best friend.
At BILL, we’ve seen firsthand the transformative power that entrepreneurs and accountants can unlock together. From streamlining your tax returns to analyzing finances for improved profitability, an accountant can make a big difference for your business.
We want to shed light on the practical ways an accountant can elevate your business operations, allowing you to focus on strategic growth.
This is an opportunity to gain insight into how professional financial guidance can empower your decision-making process and set your business on a trajectory of continued success.
Do small businesses need an accountant?
Depending on the size of your business, you may not need to hire an accountant—at least, not a full-time one. Many small businesses enlist the services of an accountant only during tax time. And while some small business owners may initially handle their finances independently, that doesn’t mean they have to go it alone forever.
For example, are spreadsheets taking over more and more of your time? Do you find yourself frustrated tracking down receipts for expenses instead of focusing on work that’s closer to your core mission?
If you find yourself spending a lot of time managing your day-to-day business finances (think payments, budgets, financial reporting, expenses, and more!) instead of growing your business, it'd be smart to hire an accountant to help manage your accounting tasks.
4 benefits of hiring an accountant for a small business
What should a small business expect from an accountant? Let’s explore the top four reasons an accountant can be an asset.
1. Financial expertise
An accountant, such as a certified public accountant (CPA), has specialized knowledge in financial management and tax compliance. They stay up to date with ever-changing regulations and best practices, ensuring that your business remains in compliance with legal and regulatory requirements. Their knowledge allows them to navigate complex financial matters and provide accurate reliable advice tailored to your specific business needs.
Additionally, an experienced accountant has a variety of clients, which means that if you are having a specific financial issue, they have probably already encountered it many times before. They can offer you advice, such as how similar companies have successfully navigated comparable situations in the past.
2. Time and efficiency
How much is your time worth, and how much of it are you spending on company finances? Do you regularly spend time on financial statement preparation instead of working on business management? Finances can be time consuming, particularly for small business owners who are already juggling multiple responsibilities.
By delegating financial tasks to an accountant, you can focus your time and energy on core business operations. Accountants can handle a variety of tasks, from bookkeeping and financial reports to payroll processing, freeing up your schedule.
3. Improved decision making
When it comes to making financial decisions, having an accountant’s advice can be incredibly valuable. They can provide financial analysis, scenario modeling, and forecasting, allowing you to assess the potential impact of various options before making a decision. With an accountant’s guidance, you can make well-informed decisions that align with your long-term business objectives. Even having an accountant come in to handle basic financial duties can be a big relief for businesses.
4. Tech optimization
An experienced accountant knows how to help you optimize your financial tech stack and leverage technology to streamline financial processes. This can include everything from accounting software to payroll solutions. There might be aspects of your business finances you didn’t even know could be automated—but your accountant does, and they can help you find the best solution for your organization.
Automation solutions, such as accounting system, help remove guesswork, reduce paperwork, and save you time. They can also connect you with the right implementation teams so you know you’re setting everything up correctly the first time.
When to hire an accountant for your small business
For those who don’t already have an accountant, it may be difficult to know when to reach out to one. After all, what is the tipping point?
Every business is different, but if you are facing challenges in the following areas, now may be the right time to bring an accountant on board:
Writing a business plan
You don’t have to write a business plan alone. An accountant can help you create realistic financial projections, identify key variables, and analyze financial aspects to help assess the overall feasibility of the plan. This will help you create a well-informed financial strategy, and give you more confidence in your financial decisions.
Choosing a legal structure
Which legal structure will you select for your business? Collaborating with an accountant ensures that you’ll make informed decisions about your company’s legal structure—including understanding your options and the pros and cons of each. Their advice will help you choose a structure that aligns with your goals, optimizes tax efficiency, and sets you up for future growth.
Small business accounting can become complicated if you don’t know how to manage it.
Luckily, an accountant knows how to track your finances in a number of helpful ways, including:
- Setting up bookkeeping systems and organizing financial records with help from accounting software.
- Helping with cash flow management and providing insights into income and expenses.
- Preparing financial statements for a clear snapshot of financial health.
- Analyzing expenses and recommending ways to create and stick to budgets.
- Providing analysis and reporting for informed decision making.
- Keeping you prepared for your tax returns all year long.
- Helping you with the month-end close.
- Maintaining a digital paper trail for meticulous record keeping.
Staying ready for tax season
This is likely the most common reason that a small to midsize business would hire an accountant. Tax compliance is tricky—you want to get the biggest deductions possible, follow all legal regulations, and be prepared in case of an audit. The stakes are high, and an expert accountant can help you get tax advice and be prepared.
We recommend talking to an accountant or other finance professional about a number of tax-related goals, including:
- Tax planning strategies.
- Gathering financial information for accurate tax filing.
- Completing tax forms.
- Ensuring compliance with tax laws and regulations.
- Identifying all tax deductions and credits.
Applying for a business loan
By working with an accountant, businesses can strengthen their loan applications by providing more accurate financial information and making a better case for financial viability.
Accountants can also assist with tasks such as preparing financial documents, analyzing financial data to assess creditworthiness, and creating a comprehensive, well-structured loan proposal.
When things change in your business, you want to make sure you have a strong handle on your finances. Here’s how an accountant can help during these shifting times.
If your company is growing, that’s a good thing—but it’s also time to make sure you take advantage of every opportunity. An accountant can help you to efficiently manage cash flow. Additionally, they can help you develop tax strategies to optimize tax benefits during periods of growth.
Buying another business
If you’re going to buy a new business, an accountant can bring financial expertise and insights to support a smooth acquisition. They can help you assess risks and determine financial impacts of the acquisition, develop financial forecasts for the combined entity, and ensure regulatory compliance every step of the way.
Selling your business
Are you ready to sell your business? Accountants can help you determine your business’s value to help you secure a fair offer. In addition, they can help in preparing financial statements and documentation for potential buyers.
How to hire an accountant
If you decide you’re ready for an accountant, there are a few simple steps you can take to make sure you find the right fit.
1. Assess your needs
What accounting services do you require, and what kind of accounting system would be most beneficial to your business? It might be once-a-year tax prep, or it might be more complicated analysis or strategic financial planning.
2. Research your options
You can start with our Find an Accountant Directory. Additionally, seek out recommendations from other business owners or industry professionals that you trust—they’ve likely worked with an experienced accounting professional. You can also search elsewhere online for a finance professional that's worked with businesses similar to yours.
3. Interview candidates
You wouldn’t hire a new employee without interviewing them, and you shouldn’t take on a new accountant—even if it’s only for 8 hours of contract work—without doing the same. Be sure to ask how they’ve handled challenges similar to yours in the past. And check out their credentials, including licenses and certifications. Are they a certified public accountant? If not, what other credentials do they have?
4. Discuss fees and services
Make sure you know exactly what to expect, including what you’re paying and what services you’ll receive. Will tax prep have a different price than financial planning? You don’t want to be surprised!
The cost of hiring an accountant for a business
So how much does it cost to hire an accountant? The amount can vary widely depending on the kind of accountant you hire and the services you need.
Some firms charge a monthly flat-rate fee for services. This is helpful because it makes it easy to budget—you know exactly how much you’ll pay every month for specific services. Other firms charge by the hour, or by specific services.
It’s becoming more common for accountants to be transparent around pricing from the outset, so dig around firm websites for pricing information—or reach out to an accountant to ask!
Is hiring an accountant worth it?
The gold standard for an accountant is to be a trusted advisor. They accomplish this by sharing their expertise, offering guidance, and providing invaluable financial insights.
In the short term, accountants will save you valuable time. In the long-term, this extra time means that you’re freed up to focus on whatever you need to do to help your business thrive.
Ready to hire an accountant?
If you’re ready to work with an accounting professional, we’ve got you covered. Check out our handy directory for small to midsize businesses who are looking to hire an accounting firm: BILL’s Find an Accountant Directory.