Q: When do you suggest I hire an accountant to help with my small business? I feel like it’s smart to have one from the start but will I just be paying for something I don’t really need?
A: This is a very common question. Accounting is one of the first things people want to offload since they do not like doing it and/or feel they need guidance in how to do it. Here are my thoughts on the subject.
Best times to call in an accountant:
:: At the very start of your business
Once you kind of have things set up and you’re about to get clients, or just got your first one, that’s a great time to call an accountant. I think it’s smart to bring this person in for a consultation/short-term project, to help you set up your accounting system. An accountant can help you pick a software if needed, and after learning about your business, can set up the perfect chart of accounts* specific to you. A great accountant will also teach you some simple tips so you can accurately and efficiently take care of your own books for the rest of the year, and can help point out accounting-type things, like remember to pay your quarterly taxes! Remember to charge sales tax! Remember that your dog is not considered your employee!
:: When you are a couple of years in and are ready to level up
Many small business owners handle their own accounting for the first year or two, when things are a bit slower and quite manageable. Once they are in a groove and business is picking up, it’s either a matter of getting busy (and the books getting a bit behind) or things are getting more complicated (and the books are getting chaotic). It’s a great time to get professional help. You could call in an accountant a couple of times a year to help clean up the last six months or so. Or consider bringing an accountant on as a regular contractor. You will not be getting less busy, so the idea of having someone to upkeep your books on at least a monthly basis may be quite attractive.** The right accountant will not only help with your monthly bookkeeping but also help you plan for the long term.**
:: When you are desperate
It happens. Maybe you suddenly get attention from a celebrity and your business grows 348% in two weeks. Maybe you decide to pursue outside funding and need help getting your financial info in tip-top shape. Or maybe you just do not understand accounting but do know it is important for your business. All valid reasons. Get the help you need. Accountants (I believe) are here to be of service to you. We want to help you in a subject matter that is not a natural knowledge we are born with. Let us help you. Do not struggle alone. We do not judge you in any way. Come with the craziest, messiest books (or no books at all) and you probably, actually, will make our day!
Relax – you got this…
BONUS: When NOT to get an accountant —> when you want to ignore your finances
I get it – you don’t want to worry about your books, you want to spend your time in your zone of genius. That’s great. But know the difference between wanting to delegate your accounting to someone else to save time, and wanting to ignore your accounting all together. Be as stubborn as you want, but as a small business owner it is IMPERATIVE you understand your numbers, if only on the high level. You need to know where you spend your money, how your income is looking, what your financial responsibilities are, in order to grow your business. Heck, at least sustain your business. As the leader of your company, even if you are the only employee, you cannot afford to be ignorant as to the financial side of your business. Period.
I hope this has given you some ideas on when to call in an accountant. Of course you can hire someone from Day 1 and have them work with you daily. But know there are many different options so keep looking around for the right accountant who will work on a schedule that feels comfortable for you and your needs. They are out there!
Footnotes
* Chart of Accounts – the list of accounts that you use in your accounting program and show up on your financial statements. Examples: Income, Office Expenses, Accounts Payable. Some accounts are common across the board for all businesses, some of specific to a certain industry (restaurant vs. business coach) or type of business (service vs. product). A program like Quickbooks gives you a basic set of accounts at the very start but it’s smart to tailor them to your business, for purposes of you tracking your own financial activity, for accurate tax reporting, and for adherence to accounting standards.
** Upcoming articles from me. Just thought of them right now as I was writing this. One is: How to choose the right accountant for you and the other is: What is the difference between bookkeeping and accounting. Coming soon!
11HundredWays 