Most small business owners try to complete many business tasks on their own. This do it yourself attitude often extends to keeping track of the business finances. With financial software available that will walk you through most tasks why do you need an accountant or a bookkeeper? The truth of the matter is that most business owners in Upstate New York aren’t doing as well as they think and could use some outside assistance.
Questions to Ask
Some questions you may want to ask when deciding if you need an account or a bookkeeper include:
- Am I familiar with basic accounting tasks and financial statements?
- Do I know anything about taxes?
- Does bookkeeping keep me away from other important tasks?
- Is my business currently experiencing rapid growth?
- Is my revenue going up but my profit is staying the same or going down?
- Do my investors expect professional financial reports?
- Am I looking to expand my business, especially into a new state?
When most business owners consider these questions they realize that financial matters may be over their heads and they need to call in the professionals.
You Actually Need Both
Business Loan Connection knows the real answer to this question is that you most likely will need both an accountant and a bookkeeper. The reason for this is because each position handles different financial situations. An account can help you see the big financial picture, offer financial advice, do your business taxes, and prepare the financial documents you need to obtain financing.
A bookkeeper handles the day to day tasks that keep the financial gears of your business turning smoothly. They can handle expenses, accounts receivable, payroll and tracking all of the financial documents you will need to file your business taxes. They can be your financial right hand that will help you determine where your money is coming from, where it is going to and if there are ways to save money to make your business more profitable.
Should Accountants and Bookkeepers Be Outsourced or In-house?
Just because you may need the services of an accountant or bookkeep doesn’t necessarily mean you need to add them to your staff right away. Both financial professionals can be hired on an outsourced basis at first and then you can hire financial staff in-house down the road if the need arises.
You can hire a part-time bookkeeper as a sub-contractor to work only a few hours a week if you are a new business. They can work in the office or from home and can handle all the day to day tasks you don’t have time for as you get your business up and running.
Initially you may only need to work with your accountant once a year at tax time. If you are looking to require capital or negotiate credit terms you may need to speak to your accountant more often, but at most you should only need to see your accountant a few times a year.
How to Know When to Make the Transition
If you decide to outsource your bookkeeping and accountant needs, then how do you know when you need to hire someone in-house? One key sign that you may need a full-time in-house bookkeeper is if your business has thirty or more employees or is generating $1 million in annual revenue. If your tax planning has become complicated, basic accounting services are no longer sufficient or you speak to your accountant more than several times a year, then you may need to look to bring a full-time accountant on board for your business.
Understanding the financial health of your business is key to making your company sustainable and investing in your financial future. Contact our experts for help in assessing the health of your business and to see if a business loan will help you meet your business goals.