Hiring an accountant is a big step for any business. For some, in fact, it can feel like one of the moments that turns an idea or a small venture into a real business. Nevertheless, for a lot of small or growing companies, hiring someone in this kind of role is inevitable. You simply have to know when to do it.
Here are four signs it might be time for your business to make the hire.
1. Bookkeeping Is Too Demanding
Often the clearest indication that it’s time for your business to hire an accountant is that bookkeeping is beginning to take up too much time or too many resources. As our piece about making bookkeeping business plans put it, this sort of effort requires a number of professional tasks. It means managing expenses, income, tax returns, and payroll, and doing it all on an efficient and consistent basis.
It’s something that a lot of independent entrepreneurs or small businesses manage for a time, particularly with the help of modern bookkeeping software. In time though, as a business becomes larger, more complex, and more profitable, bookkeeping can become a less manageable task. It’s a clear reason to look into hiring an accounting professional.
2. Taxes Aren't Efficient
Similar to general bookkeeping, taxes are often easy enough to handle before a business grows to a certain size though. At a certain point, there’s more to keep track of than most non-professionals can easily navigate. One article on what to consider when looking for a tax preparer puts it well, explaining that as your financial life grows more sophisticated, your tax returns become more complex. This can easily result in missed opportunities to maximize deductions or take advantage of savings strategies.
A professional, however, will spot these opportunities quickly and help your business to take advantage of them in simple and legal ways. A tax preparer is naturally suited to the work, but an in-house accountant is similarly well equipped.
3. Revenue is Outpacing Profit
The differences between revenue and profit may seem subtle when you’re not actively involved in making a business work. The key difference, however, is that revenue is all of the money a business takes in, whereas profit is what’s left of that money after expenses are addressed.
Given this distinction, it’s a clear problem for a company when the pace of revenue growth is significantly outpacing that of profit growth. It’s a sign that money is not being managed efficiently and by extension an indication that it’s time to seek professional accounting help.
4. You're Expanding
The points above concern specific needs and indications that call for accounting help. It’s also true though that in an overarching sense, one of the most important things to do when expanding a small business is to hire the right people for that expansion. In other words, a determination to expand or seek growth is in itself another sign that it’s time to make some new hires.
If you don’t have an accountant yet, it’s a role that should be on the shortlist — for all of the reasons given above, as well as to streamline financial management in general.
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