Financial integrity is everything when you're starting a small business, or even if you've been operating for a couple of years. Yet, the temptation is great to think that if you're the owner or office manager, you can handle all the accounting functions yourself. Isn't that what QuickBooks is for?
The truth is, there may be more effective ways to handle this crucial aspect of your business, namely hiring an accountant.
Many small businesses may balk at the expense of hiring an accountant, but the investment can actually save money for your business and, in the end, pay for itself.
How can an accountant help a small business?
When you hire a qualified accountant, you create some insurance against ineffective or even faulty financial management. For each stage of development your business is in, there are several significant ways in which the right accountant can be a lifesaver.
When a business is in the startup phase, an accountant can:
- Advise on what type of company to form.
- Guide the financial section of your business plan.
- Help you make decisions about how to maximize profit if your personal finances are tied to the company's success.
When a business is operational, an accountant:
- Manages day-to-day financial transaction recording and ensures it is compliant with the law.
- Finds cost savings with vendors, employees and office operations.
- Manages tax preparation, including all forms for employees and contractors, payroll tax withholdings and financial reports.
- Oversees payroll.
- Plans for changes in business expenses to ensure that additional costs do not cause financial hardship.
- Can design a financial safety net in case of a catastrophic event such as the death or disability of one of the business owners.
During a growth period, an accountant:
- Advises on how to handle financial growth by providing financial reports and insights on opportunity.
- Safeguards your business against audit or helps work through the process if the company is audited by the CRA.
- Helps with planning expansion, opening new locations or even selling the business.
If your business is in financial difficulty, your accountant can: Identify problem areas. Write new plans to bring finances under control. Work with creditors to set up payment plans, remove liens and reduce interest charges.
Is the work full time?
In some cases, hiring an accountant for short periods of time or for particular projects such as tax preparation may make more sense for businesses with a small number of employees. A staffing firm that specializes in placing interim accounting and finance professionals can help you during especially busy periods.
Many small companies find that dedicated accountants – either full-time or temporary – can find cost savings throughout the business and advise on budget planning, taxes and relevant laws and regulations.
Ultimately, most small business owners realize compensation for one employee is well worth the expense. An accredited expert can manage a company's finances far more profitably than even the most passionate amateur. Hiring the right accountant could be the best new hire your small business makes.