Maybe you’re a small business owner, or maybe you just want to have a better understanding of your financial situation. Whatever your circumstances may be, having an accountant can be the answer to a question you didn’t even know you had! If you’re on the fence about hiring an accountant, here are 5 signs that you need to take the plunge and get professional help.
- You are Starting a Business: If you have decided to start a business, then hiring an accountant should be one the first things you do. You want to set yourself and your business up for financial success and an accountant can help make that happen. When starting your business, an accountant can give you guidance on the following:
- Entity Structure: LLC, sole proprietor, DBA (Doing Business As), or charitable organizations are all possible ways to structure your business depending on the nature of your company. An accountant can guide you into the best option to legally protect you and your business.
- Creating a Business Plan: A business plan will allow you to set goals and steps to achieve success. Having a plan in place and an end goal will keep you on track to this achievement. Accountants can aid in the business plan process and give you key information to have a profitable company.
- If you are leasing a space, some landlords will require a business plan before renting to you.
- Staying Current with Tax Laws: Your business will have to abide by all tax laws. I’m sure you, just like every other taxpayer, is a tax law expert for your state. Kidding! Staying up to date on all of the ins an outs of tax laws is complicated. However, part of an accountants job is to have this knowledge to better assist their clients when it comes to tax filing.
- You’re New to Accounting: If you’re new to the accounting game and starting a business, then you may not know where to even begin. Processing reports is crucial to understanding the businesses financials, but what reports should be created and reviewed? Where do you go to process these reports? How do you read them? Your accountant will be able to assist you with all of it! Most accountants also offer payroll and bookkeeping services. Within these services, reports can be created and relayed to you.
- Hiring bookkeeping and payroll services through your accountant or a third party is beneficial when it comes to understanding the cashflow of your company. These services offer reporting and analysis so you can focus on other areas of the business.
- Business is Booming: Having a booming business is the ultimate goal! But with a busy business comes extra responsibility. Often times, small business owners find themselves managing their accounts and financials, but as the company grows, they may need to find additional assistance. As mentioned earlier, hiring accountants or bookkeepers can give you time to step away from the back end of the business to focus on the front end such as customers, fulfillment, or sales. Here are signs your business is growing and would benefit from additional help:
- Hiring: If you find yourself hiring extra staff, that means there is more business to go around! This also means more people to pay and more people to file tax withholding information that you are legally responsible for.
- Expanding: If you are considering expanding to a second location or even out of state relocation, then you definitely want to consult an accountant. Firstly, accountants can help determine if your company is ready to expand and if it is a good business move financially. Once you decide to proceed with expansion, your accountant can help you with the transaction and the taxes that follow.
- You’re Being Audited: Tax audits are daunting and can happen to individuals and small business owners. If you are notified you are being audited by the IRS, you definitely want to hire an accountant if you don’t have one already. CPAs or enrolled agents with the IRS can directly represent you in the case of an audit. Accountants can also help you locate specifics in your paperwork that the IRS may be requesting. They can also answer any question or concern you may face.
- Consider the benefit of hiring an accountant prior to filing your taxes. This can eliminate the stress of a potential audit and not being represented. Having an accountant that filed your taxes or helped you prepare your tax paperwork will have key knowledge of your situation and documents prior to an audit occurring.
- You Need Tax Help: Whether you own a small business or not, completing your annual taxes accurately and timely is required. You may have a straightforward return that you feel confident filing on your own behalf. However, there is a large chunk of individuals and business owners with more complex tax situations. Some tax situations that benefit from an accountant include:
- You are self employed.
- You own a business.
- You want to ensure your deductions and credits are processed correctly.
- You are unsure of the tax laws.
- You own rental properties for income.
Depending on your situation, sure, accountants may not be totally necessary… However, necessary or not, everyone can and would benefit from an accountants assistance. Before getting yourself into a financial pickle, check in with yourself or your business throughout the quarter and year to decide if it’s time to call in backup and get the financial help you need.