Should I Hire An Accountant?
Every business start-up has to ask at what point they have to accommodate their accounting needs. In the beginning, it falls on the founder to manually work out company taxes and finances. QuickBooks and its ilk will take an entrepreneur quite far. But eventually, accounting becomes a time sink that would be better offloaded to an expert while the entrepreneur can switch their attention back to realizing their unique business vision.
Here are some pressure points where businesses need to consider enlisting accounting services:
Devising a business plan
Long-term goals beyond simple lemonade-stand economics require financial projections and realistic plans to meet future needs.
Shaping the legal structure
Every company is different in its needs regarding legal structure. They could be any one of a limited liability partnership, an incorporated LLC, a sole proprietorship, or any other shape of firm or agency. Liability becomes a factor. A lone entrepreneur who manages the company out of pocket is exposed to risk from lawsuits, debt defaults, creditors, and other pitfalls. Determining how to separate the liability of a business entity from its constituents is a task best left to accountants.
Tracking accounts and money flow
The structure of cash flow becomes bothersome to manage after a business grows beyond its garage start-up roots. Keeping track of whom owes who money, how much is expected to be received, and what process to follow when invoices aren’t paid can eat up a full schedule. This work is of course the bread-and-butter of the accounting field. It’s not just about tracking the information, but making it available as charts and graphs so that officers of the company can see the company’s financial health at a glance.
Tax needs outgrowing single-user software
Taxes on an individual level are relatively simple for most people. They file a return based off their paystub or a brief earnings statement and that’s it. By the time a company is up to several employees, they have to handle payroll withholding, legal employment status, and the company’s own tax responsibility as well. Then if they do international business, tax laws become even more cumbersome. The tax code in just about any industrialized country requires a full-time expert to keep abreast of changes.
Employees needing benefits
There’s more to compensation than a paycheck. Young, fresh techie startups are happy to work for a square wage and handle their own needs, but when a company’s workforce expands, it becomes necessary to offer incentives to stay competitive in the job market. Employees start asking about health care, vacation time, investment plans, and all the perks typically summed up under a benefits package. Managing these details is also the domain of accountants, who can work out the best strategy for companies in need of a benefits provider.
The company attracts investors.
Should a corporation inspire venture capitalists to start writing checks, the company is now taking on responsibility to take that investment seed and provide a return. In the most optimistic projection, nearly every company looks forward to the day it can be publicly traded. Hopefully by the time a company is ready to offer stock, it has grown well beyond hiring its first accountant.
How Much Does It Cost For A Small Business Accountant? The baseline price for a hired accountant in the United States is between $100 and