There are many reasons why a small business should hire an accountant during the early stages of operation but the cost benefit analysis needs to be done so as not to take on too much financial responsibility.
Entrepreneurs need to know when it is right to hire a small business accountant. It is sometimes stupid to spend massively hiring a small business accountant when you are just starting out. I once asked a potential client to give me reasons why they want to engage my service as an accountant.
In this article, I will be relying on my experience working with small businesses as an accountant and business coach to answer this question that was asked by one of the readers of this blog.
The question is; when should entrepreneurs hire a finance professional like small business accountants?
When DIY is no Longer enough: as a small business owner, one of your objectives was to grow your business. If this objective was achieved and your business did grow then, it will get to a time when do-it-yourself style of accounting will no longer be enough.
Payrolls for example will become a bit more complex when your business starts employing other staff members.
As an entrepreneur, you know that you need the service of a small business accountant when you no longer feel comfortable with those accounting skills that you must have picked up from day to day interaction with the business community.
During System Developing and Acquisition: if you have managed to be on top of things to the stage where you then require acquiring a new accounting information system.
The wise thing to do now is to employ the service of a small business accountant who is experienced and understand the role of accountants in the development of accounting information system.
When You Need To Raise Finance: the whole process of sourcing for finance is not an easy that any entrepreneur will want to venture into. There are difficulties faced by small businesses when raising funds but having a small business accountant by your side will make the whole journey a little less stressful.
When Your Competition Is Outperforming You on Strategic Grounds: small business competition has moved on from what it used to be and therefore more complex. To be able to keep up with the competition that is going on among small businesses, a forward thinking start up business will hire a small business accountant to help strategize the way the business compete.
When Thinking of Going Public: there listing requirements that takes someone who is a qualified small business accountant to make sure that things are done the way they should be. At this stage of your entrepreneurial journey, the business must have significantly grown and requires a qualified accountant who specialises in managing small businesses.
Couple Of Years Before Being Audited: first year auditing are usually more expensive and this is due to the fact that the method of auditing which is risk based auditing requires extensive reliance on controls but this only possible when the accounting and management control systems in place are designed and monitored by qualified small business accountant.
When you want to buy a Business or Sell Your Business: buying or selling an entity is a huge task that requires the service of finance professionals like accountant who understand due diligence process and how businesses are valued.
When a Business Starts Interacting with Regulatory Authorities: businesses are example open systems that interact with its environment. In most countries, businesses are allowed grace period that they will not be required to pay taxes but things quickly change as soon as this grace period is over and the company start making profits.
A small business owner that is not knowledgeable in taxation is certain to make costly mistakes that can be avoided if a small business accountant who specializes in small business taxes is employed.
Many entrepreneurs look back and regret that they did not hire a small business accountant at the right time. I am sure that you will no longer be in doubt of when to hire a finance professional like a small business accountant after reading this article.
Wait!! Before you rush off to hire a small business accountant, make sure you understand how to select a small business accountant.