When to Hire an Accountant

Accounting Help for Small Businesses and Startups

All business owners know that while controlling overhead costs is important, not skimping on services that will help the business grow is even more important.

And while you may have handled most of the accounting yourself when you started your business – or had a few key staff members just do the books on a day to day basis – there comes a time when your business outgrows that DIY approach.

How to Know When to Hire an Accountant and What You Need

The question, of course, is, how do you know when to hire an accountant for your startup or small business?

Or, rather, when does not having an accountant start costing your business more than hiring one would?

Is your business losing money because accounts receivable is a mess? Are you missing out on growth opportunities because of cash flow problems? Do you even have the financial data organized well enough to know this kind of thing?

These are the real metrics we are dealing with here.

Luckily, there are some good ways to know when you should hire an accountant for your small business, and ways to determine what kind of accounting help you will need.

4 Signs You Need to Hire an Outsourced Accountant for Your Atlanta Small Business

4 Signs You Need to Hire an Outsourced Accountant

Let’s go over a few common situations where hiring outside accounting help or adding a permanent accounting position to your payroll will benefit your business.

  1. Your Current Bookkeeping Methods Aren’t Cutting It Anymore

Lots of small businesses and startups start out just doing the day to day bookkeeping in QuickBooks or Xero.

This may work fine for a while, but over time, problems can crop up, and these usually mean you need to consider hiring an outsourced accountant to help with the books.

Signs your business needs bookkeeping help:

  • You or your employees are starting to fall behind on the books.
  • Handling the bookkeeping is becoming so time consuming that other tasks are being neglected.
  • Errors keep cropping up.
  • Accounts aren’t being properly reconciled at the end of the month.
  • The business lacks a streamlined accounting and finance and accounting strategy.

The good news is that no matter how messy your books are or how behind you are on reconciliations, an outsourced accountant can come in and perform historical accounting – also known as clean up accounting – to ferret out and correct errors and reconcile your books.

They can then set up the proper bookkeeping structures and processes and handle ongoing bookkeeping for your company going forward.

Hiring an outsourced accountant to handle bookkeeping can be a cost-effective way to get professional accounting services for your small business.

It provides a great alternative to hiring a full-time accountant, saving you money on the salary, benefits and hiring costs that come with adding a new employee.

Of course, there may come a time when your company has grown enough that you do want to hire an in-house accountant.

But for companies of a certain size and even for larger companies looking to save money, an outsourced accountant provides an excellent and highly effective solution. 

  1. You Need Real Financial Statement Preparation and Analysis

It’s easy to get so involved in the day-to-day challenges of operating a business that you forget about big picture planning like financial statement preparation and analysis.

But any healthy business will need to have the big three financial statements prepared regularly – both for planning, budgeting and forecasting and to satisfy the requirements of any outside investors or lenders.

  • Balance Sheet: Shows assets, liabilities and equity as a snapshot in time. Measures financial reserves and liquidity.
  • Income Statement (Profit and Loss Statement): Focuses on revenues and expenses over a specific period.
  • Cash Flow Statement: Track inflows and outflows of cash over a set period of time.

Many bookkeeping software products and online bookkeeping services claim to be able to prepare these for you, but to get real insights and make sure they’re done right, you need the services of an actual accountant.

These reports will need to be based on solid bookkeeping data that has been checked for errors and well-ordered for easy reporting, so having an experienced accountant on hand to handle those fundamentals is crucial, as well.

In addition, you may need special financial statements prepared for management/owner reporting, investor reports, bank reports and industry-specific reports at various stages in your business’ growth.

An experienced accountant can also help you interpret your financial statements and give you actionable insights on them. 

  1. Your Business Needs Help with Budgeting and Forecasting

A growing business will need to plan for the future and set both long-term and short-term goals to benchmark success.

Having financial statements prepared by a professional lays the groundwork for this, but you will also need budgets and forecasting models to help you track cash flows and provide accurate projections for future growth and management decisions.

Good budgeting and forecasting can also help you detect and correct potential issues – cash, sales or revenue shortfalls, for instance –  before they become a major problem.

An accountant can build custom budgeting and forecasting models for your startup or small business.

They can also help you reforecast as needed, provide expert analysis and suggest sound business strategies based on your performance.

  1. You Need High-Level Financial Strategy and Management Advisement for Your Growing Business

At some point, you will likely reach a stage where your business needs operational CFO services for complex accounting matters such as strategic planning, management reporting and advisement, and financial operations oversight.

You may also need business advisory services as your business continues to grow.

Larger businesses will often fill this need by hiring a full-time CFO, but the solution for smaller outfits is usually to hire an accountant to perform outsourced CFO/controller duties and other management-level guidance.

When do small businesses begin to need ongoing CFO/controller services?

It’s usually a new stage of growth – say, scaling from 10 to 100 or 100 to 1000 transactions a month, entering a new market, bringing on new investors, or dealing with financial business challenges you don’t quite understand.

Or, small businesses and startups might hire outsourced CFO services on a project basis ahead of events like major transactions, sales, mergers, transitions and expansions into new markets.

Talk to an Atlanta Experienced Professional Accountant

Talk to an Atlanta Experienced Professional Accountant

Whenever you are facing a new financial frontier in your business, you should consult with an experienced accountant to find out whether there are business accounting services that may benefit you.

The financial experts at Rialto can talk to you about where your business is now and discuss how our services can help you get where you want to go.

Call us now at (404) 850-7932 for a complimentary financial discovery session. We can answer all your questions and figure out a plan that suits your needs.

A.J. Dote