Many small businesses operate on relatively narrow profit margins that force business owners to get creative with how they manage their money. Often the first things to get cut from the budget can have a huge impact on the success and growth of the company. With that said, there are certain items on your expense list that aren’t generally worth cutting out completely, namely accounting services.
Accounting is important to your business operations for a variety of reasons, including budget management, tax preparation, and legal compliance. But how do you keep your accounting practices intact without sacrificing your take-home profits? In this post, we’re presenting 3 alternatives to hiring an accountant full time so that you can stay on track with your financial goals and keep your accounting processes in good standing.
When do you need an accountant?
Depending on your level of experience with accounting, you may have the willpower and expertise to handle your business accounting on your own, and that’s great! However, there are certain instances where it’s best to have a trained expert around to help if you’re not prepared to take on the complexities of business accounting.
Here are a few examples of times you might want to have a professional accountant around:
- When you’re forming your business: Setting your business up for success in its earliest stages is important if you want to avoid headaches and challenges in the future. Hiring an accountant when you form your business can help you create intuitive accounting processes that you and your staff can follow as your business grows.
- When you’re filing taxes: Small business tax code can get pretty complex depending on the size of your business and industry you’re in. Hiring a CPA or enrolled agent can save you money on business taxes if you qualify for credits and deductions, and ensure that you’re following proper tax protocol. You can even take care of your tax preparer fees from a refund transfer if you earn enough money back on your refund!
- When your business is growing: Business growth often means that your company is experiencing structural changes, or it will be soon. Whether you need assistance building budgets or want support getting business financing, a professional accountant can help.
1) Hire only for the services you need
You don’t necessarily need to hire a full-time accountant onto your payroll to ensure your business is in good financial standing, but it may be a good idea to hire a freelance accountant to handle the specific tasks you need support with. For example, maybe you can manage daily bookkeeping on your own, but you’re not too sure how to file taxes for your business. Hiring an accountant on a project basis can save you money and ensure you take care of those super important processes with care.
2) Use accounting software
Another alternative to hiring an accountant is to use accounting software instead of, or in conjunction with professional accounting services. Many accounting software programs are easy to use and can help you manage daily practices on your own at a lower cost than hiring a full-time employee. You can either use a single accounting program or a combination of apps to help you take care of tasks like expense reporting, financial forecasting, and budgeting.
Some of the best bookkeeping and accounting apps for small businesses include:
3) Get bookkeeping help
Bookkeeping and accounting are often used interchangeably in the finance world, but there are a few differences that you should be aware of so you can make the best hiring decision for your business.
A bookkeeper is a trained individual that organizes and collects financial data. Bookkeepers do not generally need a degree in finance, while accountants most often have their MBA or a Master of Accountancy in finance. An accountant typically charges more for their services because they are able to evaluate financial data and give advice based on their findings.
If you’re confident in your accounting knowledge, you may be able to hire a bookkeeper to help you take care of the more menial tasks while you take on financial reporting and other responsibilities that you might have hired out to an accountant in the past.
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Keep in mind: Many accounting tasks relate to legal compliance, so it’s important that you address these matters with the utmost care and professionalism if you decide to do your own accounting for your business.