As a small business owner, you wear many hats. You are responsible for the overall success of your company, from generating sales to keeping track of expenses. This can be a lot to handle, especially when you are first starting out. That’s why it’s important to have a strong support system in place, including a reliable accountant.
While you may be tempted to handle your business’s finances on your own, there are many benefits to working with a certified public accountant (CPA).
Reasons to Hire a CPA
1. They can help you save money. An experienced CPA can help you take advantage of tax breaks and deductions that you may not be aware of. This can lead to significant savings over the course of a year.
2. They can help you make sense of financial reports. A CPA can review your financial statements and help you better understand what they mean. This can be helpful in making important business decisions, along with personal and leisure finance. Having the correct reports makes filing taxes a breeze.
3. They can help you plan for the future. A CPA can help you develop a financial plan for your business, including budgeting and cash flow planning. This can help you make sure your business is on track to meet its long-term goals.
4. They can provide peace of mind. Knowing that your finances are in good hands can give you peace of mind and allow you to focus on other aspects of your business. You have to remember what your time is worth and how much you could be making instead of doing your business accounting.
What To Think About Before Hiring An Accountant
If you’re not sure whether you need a CPA, consider these factors:
1. The size and complexity of your business. If you have a small business with simple finances, you may not need a CPA. However, if your business is large and complex, it’s likely that you will benefit from working with one. If you have contractors and employees, inventory that needs to be tracked, multiple departments within your business, you should probably go with a professional.
However, if you are just starting out, the best piece of advice is to keep your personal and business expenses in separate accounts. This makes using software easier and is great for those who are new to the business world.
2. Your level of financial knowledge. If you are comfortable dealing with numbers and financial reports, you may not need a CPA. However, if you find these things confusing, working with a CPA can be helpful.
3. Your business goals. If your goal is to grow your business and make it as successful as possible, working with a CPA can be a smart move. A CPA can help you develop and implement strategies to achieve those goals in a realistic amount of time.
4. Your budget. If you have the budget to hire a CPA, it may be worth doing so. However, if you’re on a tight budget, wait until your business is more established before hiring one.
The bottom line is that there are many benefits to working with a CPA. Just remember to consider your business’s size, complexity, and goals. You should also take into account your own financial knowledge and comfort level. If you decide that working with a CPA is right for you, be sure to find one that you can trust and who has experience working with businesses like yours.
For a reputable CPA ask your friends and family who they recommend. This is not an area of business that you want to go through trial and error with.
Difference Between a Bookkeeper and CPA
Many business owners are not sure whether they need a bookkeeper or a CPA. Here is a brief overview of the difference between these two roles:
Bookkeeper: A bookkeeper is responsible for maintaining financial records. This includes tasks such as tracking expenses, preparing invoices, and recording income. A bookkeeper does not need to be certified, but they should have experience working with numbers and financial reports.
CPA: A CPA is a certified public accountant. CPAs are licensed by the state in which they practice. In order to become a CPA, an individual must pass the Uniform CPA Examination. CPAs are qualified to provide a variety of accounting and financial services, including tax preparation, auditing, and financial planning.
So, which one do you need? If you have a small business with simple finances, a bookkeeper may be all you need. However, if your business is large or complex, you may benefit from working with a CPA. A CPA can provide valuable insights into your financial reports and help you develop a plan for growing your business.
If you go with a bookkeeper, at the end of the year they will hand you reports and you will still need to file the taxes yourself or take them to an accountant; this is not something that is in their scope.
Can You DIY Your Accounting?
The answer is that it depends. If you have a small business with simple finances, you may be able to get by without hiring an accountant. However, if your business is large or complex, you will probably need the help of a professional.
Meaning if there are any type of errors in your income, expenses, deductions, etc. All of your
Hiring an accountant is a wise decision for any business, no matter how small or large. Accountants can provide valuable insights into your financial reports and help you develop a plan for growing your business. They can also assist with tax preparation and other financial services.
If you’re not sure whether you need an accountant, consider the size and complexity of your business, as well as your own financial knowledge and comfort level. If you decide that working with an accountant is right for you, be sure to find one that you can trust and who has experience working with businesses like yours.