If you drown in a sea of statements of invoices , receipts and cash flow that you can not make heads or tails of, it may be time to call in professional help. An experienced accountant can help you organize your records, tighten your budget and ensure you stay financially on the right track. There are a number of good reasons to choose to hire an accountant for your business, as with hiring outside help for any area, but there are also some potential downsides. Here is an overview of the arguments you should consider before outsourcing your accounting requirements.
Pros of Hiring an Accountant
1. Accountants know what they’re doing
There are a lot of technical details that go hand in hand with handling the finances of your small business and even a simple mistake like putting a decimal point in the wrong position could come back to haunt you. This is particularly true when it comes to filing your taxes, as inaccuracies or unintended omissions may end up attracting a massive IRS red flag. An accountant’s job is to make sure all of your records are error-free and that the numbers add up the way they’re supposed to so you don’t land in hot water with Uncle Sam.
2. They can save you time and money
Your Accountant wants your company to be profitable. One way to do this is to search out unrealized savings. For example, your accountant can review your monthly expenditures to see where the fat can be trimmed, or come up with a way to streamline your record keeping to make it less time-intensive. When tax time rolls around, your accountant is the one who combed to find any potential credit or deduction through your financials, leaving you free to concentrate on other aspects of running your company. If you want to spend more hours expanding your client base, designing new products or refining your marketing plan, this can be a big benefit.
3. They do more than just crunch numbers
As well as juggling your accounts, the accountant will also provide expert guidance on everything from deciding the pricing strategy to receiving funding. If at any point you decide that you need to close or sell your company, they will give you advice on how best to proceed. That sort of feedback can be invaluable, particularly if it's your first entrepreneurial foray.
Cons of Hiring an Accountant:
1. Their services aren’t free
Accountants demand payment for the work they do, and the additional cost can be a major budget buster for certain companies. Accountants' rates differ depending on what's involved, but the average cost for basic accounting services in 2013 was $65 an hour according to the new Intuit pricing survey. Depending on what type of company you have or how good your relationship with your accountant is, what you end up paying might be lower, but the bottom line is that you are always on your payroll by recruiting one, even though it is just on a part time basis.
2. There’s no guarantee against mistakes
Accountants, like everyone else, are human and at some stage there is no way to guarantee that they do not make a mistake. If it's something minor that can be easily rectified then it's not typically a big deal. But this could be catastrophic on a larger scale. For example , let's say they import your cost details into their accounting software and don't move a key expenditure. If they don't pick it up, you may miss out on a valuable deduction when it's time to file your taxes, making your tax burden higher than it would be.
3. It’s easy to lose touch
When you're stretched for time, delegating your small business accounting to someone else makes sense, but that doesn't mean you can take a hands-off approach altogether. Even though your accountant may be doing all the heavy lifting, it is still your duty as the company owner to periodically check in and make sure things move smoothly along. You will have a relationship with your accountant, with both of you having an active role.
Looking at where your business is and what the reach of your needs is, is possibly the best way to direct your final decision about how to hire an accountant. If you have an all-day view of numbers at the end of your wits or you need an objective viewpoint on what path you should push next, having a fresh pair of eyes is most likely to help you. On the other hand, if you have the patience and know-how, the answer can be as simple as investing in accounting software for the small business and taking the time to learn the statistics.
Robert Arnone’s mission is to serve as the trusted advisor for business owners that helps them achieve their financial goals. By applying expert knowledge in accounting and financial best practices in a personalized fashion, our clients are able to plan for and more importantly, achieve, financial success. We offer these services at a value that large accounting firms can't afford by holding dear the values of Integrity, Service, and Value. Contact us today for accounting services that go beyond your expectations!