As a small business owner, you may not be thinking much about the need for accounting services. That’s not surprising, since a lot of small business owners wear multiple hats and perform just about every role, from customer service, to human resources, production and, yes, accounting.
At what point, though, should you give up some of those hats–particularly accounting–and consider hiring a firm to take over that area for you?
Accounting tasks are usually thought of as setting up the accounting software system, entering transactions, and running reports showing both projections and actual results.
In truth, there is a lot more involved and you’ll need to give serious thought to your skills and available time in order to decide if you can take it all on, or if you put your company at risk by not hiring a professional.
Taxes and Employees
To comply with the taxes and regulations in your industry, you will need to have knowledge of the U.S. Tax Code, something that confuses most people. If you don’t file your taxes, for yourself, your company or your employees on time, you will be hit with interest and penalties, something a professional accounting firm can help you avoid.
They can also advise you on payroll forms for employees, tax credits, deductions, and forecast what you will owe so that you can plan for it ahead of time and not come up short at the last minute.
Legal and Business
There are a lot of questions when starting a business, and even more when business is chugging along. Should you remain a sole proprietorship? Or, would it be better to choose an S Corp. or an LLC? A CPA can help you decide which legal structure is best for you, aid in setting it up, and helping to write a business plan.
They will also help answer a multitude of financial questions, such as why revenue is increasing but profit isn’t, or what you need to do when expanding to another state. Trained to look ahead so that deadlines aren’t missed, accountants are highly organized.
Beyond all the important, but more routine reasons, the biggest–and probably most stressful–reason to hire a CPA would be in the event you are facing an IRS audit. Even better is to hire them beforehand, so that you can avoid one.
CPAs can also guide you in the case of rapid growth; whether to lease or buy items; or if you plan to buy or sell property, or even your business. They are practical-minded professionals who have to learn, and remember, the seemingly infinite number of rules the government has set out for us to follow. Rules the rest of us really don’t want to remember, much less follow.