Ten Signs You Need an Accountant Help Manage Your Business
There’s a good chance that when you first started your business, your bookkeeping and accounting needs were fairly straightforward and simple. You logged your income and your expenses into a simple software program like Quickbooks and nothing else seemed necessary. But as your business has grown, the number of transactions that need to be tracked have made the task a lot more cumbersome and time consuming, and you are probably finding yourself with technical and financial questions whose answers aren’t obvious.
One thing is clear – you don’t want your lack of knowledge to lead to legal or compliance issues, and you certainly don’t want to put yourself at risk of an audit caused by your inexperience and lack of expertise. If you’re wondering whether the time has come to bring in a professional and start using an accountant, here are ten signs to look for:
- You Don’t Have Time to do the Stuff that is Important to You
When you decided to set off on your own, you did so because you had a vision, a dream, and a passion for the work that you would be doing. If you are finding that you’re spending too much time on bookkeeping and not enough on the work that you enjoy – or the important tasks that will bring in new business – then it is probably time to hand it off to a professional. After all, if you had wanted to be a bookkeeper or an accountant then that’s the career you would have pursued.
- Your Business Has Grown Beyond Your Capacity to Manage Its Financial Aspects
If this is the case, then congratulations! But the reality is that once revenues start to pour in and you see the ability to expand, the financial aspects and responsibilities grow too. With more customers to account for, more equipment to invest in, more employees on the payroll and more vendors that need to be paid, things can quickly become complicated and some of the tax requirements change.
- You’re Bringing in More Money But Can’t Find the Profits to go With It
This is a serious warning sign, and ignoring it is a mistake. There are a number of common mistakes that can lead to increased revenues failing to lead to increased profitability, and a seasoned accountant is the professional best suited to helping you find out which ones you are making. It may be that your overhead is too high and you need to cut costs. An accountant will quickly assess the adjustments you need to make and put you back on the right path.
- You’re Starting to Realize How Little You Know About Accounting
When things were new and you didn’t need to worry about anything beyond income and expenses, you were fine. But now you’re being asked to prepare or read financial statements, or a client wants a report that is totally beyond your understanding. If you are starting to find yourself encountering terminology that is unfamiliar and you feel like you are at a disadvantage, then it’s time to ask for help from an accountant – even if it’s just to explain the meanings and put you on solid footing so that you can move forward on your own.
- It’s Tax Time and You’re Feeling Very Vulnerable
The United States Tax Code is one of the most complicated documents that exists, and trying to navigate its requirements can be overwhelming. The best way to avoid making costly mistakes that can lead to penalties – or even to ensure that you are taking advantage of all of the possible write-offs and deductions that are available to you – is to work with a professional who has chosen accounting as their life’s work. If they have dedicated themselves to understanding all of the nuances of the world of taxes, then you should take advantage of their knowledge.
- You Need to Prepare a Report for Investors in Your Business
Whether you currently have individuals or institutions that have invested in your business or are seeking investment, you are likely to be asked for financial reports that provide immediate access to essential information about your business’ health. A financial report is a snapshot of what is going well and what needs improvement, and is the document that you are most likely to be asked to produce. Not only will having an accountant prepare a financial report assist you with this task, it may also preempt problems in the future regarding improper accounting practices and compliance issues.
- You Are Considering Expansion
When your business has become robust enough that you are considering expanding into a different state, it’s not as easy as renting space and hiring personnel. Different states have different requirements regarding business licenses, taxation, personnel and payroll issues, and more. Hiring an accountant ensures that your transition is smooth and that you are adhering to all regional requirements.
- You Work in an Industry that has Specific Regulatory Requirements
Running a growing business is responsibility enough, but when you add on governmental compliance and regulatory requirements that are specific to your industry, it just adds another layer of difficulty. An accountant is able to shoulder the burden of preparing all necessary documents, as well as to ensure that you are keeping appropriate records and fulfilling all reporting obligations in a timely and appropriate way.
- You’ve Received Notice of an Impending Audit
There are few things that can create fear and anxiety as quickly as receiving notice that you’re about to be audited, but working with an accounting professional can just as quickly allay those fears. Working with a professional will quickly set your mind at ease as they go through your records, assess what issues needs to be addressed, and help you prepare all of the documentation needed to get through the process.
- You’re Contemplating Selling or Expanding Your Business, or Buying or Selling Property
The tax ramifications of selling your business, adding to your business, or buying or selling business-related property can be enormous, and can lead to unnecessary expense if it is not properly structured or accounted for. Going through the process with an accountant’s guidance assures that you are approaching the issue with the advantage of knowing all of your options, as well as the advantages and disadvantages of each.