4 Reasons Why It's Time to Hire an Accountant for Your Small Business Only 30 percent of small business owners use one, but that's a mistake.
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According to the 2019 Onpay Small Business Finance and HR Report, just 30 percent of small business owners work with accountants. That's not surprising, given how much each dollar counts to a small company.
Doing the accounting yourself certainly saves some money in the short term. That said, it might be worth hiring an outside accountant for your company. You, of course, have to weigh the pros and cons yourself, and each business is different, but there is much to be gained by bringing in an outside resource.
Here are four reasons why you should consider hiring an accountant for your small business:
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1. It will save you time and stress down the road
The Onpay study above found that 28 percent of small businesses have been audited by or received a formal notice from the IRS.
I've seen friends go through audits at their companies and can say with certainty that it can be a nightmare. Just the notice itself can create anxiety over whether you made mistakes.
But even if you did everything correctly, you'll still spend hours preparing to demonstrate that and have to deal with all the anxiety that comes with the experience. Having an accountant will eliminate this worry and free up your time, giving you someone to take that burden off your shoulders.
2. Accountants can help with all finance-related work
Hiring an accountant to deal with your taxes alone can be quite useful. If the accountant can support the entire financial well-being of your company, you'll benefit even more. In the Onpay report, 38 percent of small business owners said they expect their accountant to help with payroll, 32 percent expect help with financial projections and 27 percent with cash flow.
When I have started small businesses, my intention was always to offer services and solve customer problems, not to spend my days coping with all the minute financial details and associated stress.
Having someone else to help take care of those pieces and ensure that the numbers work out across the board can be liberating. It frees you to spend more time on what you care about.
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3. Accountants can even provide business consulting and advice
Accountants can support business strategy as well as your company's financial health. In fact, 87 percent of respondents in the Onpay study agreed or strongly agreed that their accountant is a trusted advisor to whom they can turn for a wide range of business advice.
Accountants have worked with numerous other businesses. They often have a keen sense of what it takes to run a company and can offer good advice on strategy. I can think of times when my accountant has proposed a new business unit or changes in pricing that have helped improve our bottom line.
4. Accountants are trustworthy sources of support
The study reveals that for many businesses, accountants were the advisor whom owners and managers trusted the most for business-related advice, more than family, friends, lawyers or financial planners. Furthermore, 82 percent of respondents said that their accountant knows the business well or very well.
Accountants are so valuable because of their objective stance. They don't have the same bias as friends or family, and they are not intertwined with your company the way employees are. Moreover, they have a stake in the health of your company so they have a strong motivation to see you succeed.
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How to find the right accountant for your small business
It can be time-consuming and complicated to search through online reviews, reach out to several accountants and have many conversations, trying to find the right fit. So to find the right accountant for you, ask for recommendations from professional advisors, trusted friends and colleagues. This approach helps you pre-vet your accountant candidates, making it much simpler to find the right one.
When you have a short list of candidates, you should go into conversations with prospective accountants having done research to know what you are looking for and how you'll define the right fit.
It's not just about the accountant's experience. Also consider their commitment to your business and how well you get along. Once you find the right person, establish some ground rules for a trial period before locking your business into a larger contract.