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Do I Need an Accountant?
The answer is YES. What are the roles of a new business owner? The roles include CEO, Marketing Director, Salesman, Decorator, Stock-person, Secretary, Security Guard, and more times than not, Parent. Throw Accountant/CFO in the mix and now "overwhelmed" in an understatement. So many times this is the scenario I walk into when I meet a new client [Me: "Ok. Tell me what you are currently doing to manage your company finances." Client, "Well, not very much. I take in money and deposit it. I then pay the bills when they come in." Me, "So basically, if you have money in the account, you are doing well, if not, then not so much." Client, "Basically, yes."] If you are in this situation you should not feel bad. If everyone was an accountant, I wouldn't have a job. I tell new accounting and/or college students all the time, "You either love accounting or you hate it." Very rarely is there anyone in between. For this reason, new business owners should truly seek out an accountant even at the start up of their company. "But it will cost me a fortune and I need every penny I can spare." I know this, believe me. I am probably one of the cheapest people I know, BUT, to run a successful, growing, and well-balanced business a business should have balanced and well managed books. Now, when thinking about this you have 3 choices. (1) Do it yourself (2) Hire an accounting in-house (3) Outsource. If you decide to do this yourself, God Bless you because it is extremely time consuming. Should I do this myself? If you answer "Yes" to all of the following, then the answer is yes. TIME - On a normal basis, my clients spent about 3 to 4 hours each day on their accounting if accounting was maintained at all. Do you have this time to spare? CONSISTENCY - Due to time constraints and other demands getting in the way, many business owners have a hard time being consistent in their approach to their financials as well as completing them. They don't do you any good if you can't keep them accurate and timely. Are you able to do this? ACCURACY - Do you truly know what you're doing? Do you understand the difference between cash and accrual accounting and which is better for you? Do you know about the latest and greatest tax laws and are you managing your finances to get you the best tax advantages at the end of the year? Do you have time to keep all accounts balanced or do you know what this means? MONEY - Oh, now she is speaking my language. Think about it. If you pay yourself (or wish you could at this point), how much are you worth? $15 per hour, $20, how about $40? If you spend 4 hours per day at a rate of $20 an hour, 5 days a week, you are forking out $400 per week or $20K a year in personal expenses on accounting that might not even be as accurate and useful as you like. Are you ok with this expense? USE - Do you know how to use your financials to stay in the "black," budget, forecast, do trend analysis or set goals? Goals are a major need in a business and your financials are an vital part of that setting process. "OK so I don't need to do it myself, so now what?" Now you have to decide if you need to hire an accountant or out-source. Be sure that if you want to hire an accountant, it will be costly. Don't settle for someone who can handle light bookkeeping because you will NOT be getting the information in a way that it best for you to do all you should. I advise Outsourcing. Not only because that is what I do, but so many times, it is in the best interest of small business owners. I don't know about you, but when I started my first company, I did not have $40 to $50K to fork out to an accountant. Instead, outsourcing was the way to go. Cheaper, more experience, and no delays due to vacations, sick days, or turn-over. How do I find the right Outsourcing Company? EXPERIENCE - First, check the experience of the firm. Be sure that they have experience either in your industry, the size firm you have, or in accounting in general. Be careful and be sure that they are degreed in accounting as well as up-to-date on current accounting and taxation information and laws. COST - Are the firms rates hourly, based on work-load, or a flat rate? Are the rates contingent on any change and at what point might they change? Are there any ways to minimize the cost by dividing the work load between the business and the firm? PERSONNEL -Who will be working on your financials? Many firms have a main accountant and then use the services of lower-qualified personnel. This might keep the costs low, but be sure that the work is regularly supervised and reviewed before coming to you. ADDITIONAL SERVICES - Are the financials processed and delivered only? Are they available for advice when needed? Do they look out for your best interest? INFORMATION DELIVERY - Will they deliver the information in a way that will help you reach your goals? Will they walk you through the information to be sure you understand what you have received? Do they speak to you in a way which helps you understand how you can use the information to set a budget, see problem areas, or reach your goals? How do I get this information? Meet with the possible Accounting Firm you want to work with. When you meet with them be sure to go over the following information. Be sure they are clear and understandable. If you are feeling rushed, you are in the wrong place. They should give you undivided attention and you should feel like you are their TOP client. If you can't get that feeling face-to-face, how will they treat your books?
REMEMBER take your time in making this decision. You wouldn't choose your doctor lightly. Your business is your baby, take care of it and be sure others will as well.
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More articles on business accountancy and finance Understanding Financial Statements
Finding a Great Accountant For Your Small Business
Accountants Hold the Key to Unlocking Small Business Cash Flow Mysteries
8 Bookkeeping Mistakes You Need to Avoid
Accounting Outsourcing Will Share Your Burden of Responsibilities
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