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Should I Hire an Accountant for my Business?

10.17.2017

Bookkeeping, one of those necessary evils that every business owner must become familiar with. You may think that the only reason you have for keeping the books for your business is so you know how much money you need to pay for taxes and so you can file your yearly earning report with the government. However, bookkeeping is an important tool that helps you make better decisions for the health of your business. This article will explore the three options you have for keeping up with your business’s financial records:

  • Doing it yourself
  • Hiring a bookkeeper
  • Hiring an accountant

You’re Doing It All!

You started your business because you have a vision for a product or service. You incorporated your business, you’re sending sales emails, you’re meeting with clients, and you’re growing your business. On top of that, you’ve been keeping track of your company’s financial transactions. You didn’t go to school for finance but you’re learning on the job about what it means to be a business owner and how to manage your company’s finances. Fortunately, there are services out there that can help you meet your company’s accounting needs. We also provide Merchant Maverick rating as a quick review (we have no affiliation, just think that it’s a quick apples-to-apples comparison between the two popular options below).

Intuit Quickbooks

Intuit Quickbooks is one of the most respected accounting software subscriptions out there. The cost of Quickbooks ranges from $10 – $35, with the current discount, depending on the types of services you require. Quickbooks offer a wide range of reports, customizable invoices, inventory capabilities, payroll support, multiple currencies, integration with multiple accounts and a beautiful user interface that keeps you up to date on your most important Key Performance Indicators (KPIs). Additionally, the software just added a project management feature to help small businesses track and manage progress towards large tasks and initiatives.

Quickbooks also offers a cloud-based platform as well, which for an owner that is constantly on the move, is a must. You can access your business’s key financial information from any laptop via their secure online portal and track expenses and deposits in real-time. Reconciling your bank account has never been easier.

Merchant Maverick Rating: 4.5 out of 5

Xero

Another great software is Xero, an accounting solution that is based out of New Zealand. Xero’s motto is “beautiful accounting software” and that is visible with every click. Just like quickbooks, the user interface is very appealing and the product offers a lot of services. Pricing can range from $9 – $180 a month depending on the size of your company. Unlike Quickbook, Xero is an accounting solution that your company can grow into and it is one of the most preferred solutions for medium to large companies. One of the biggest appeals of Xero is that it offers unlimited users, a luxury that many other services, like Quickbooks, charge extra for. Some of the capabilities that Xero offers are expense tracking, invoice creation, bank transaction tracking, billing, live bank feeds, customizable reports W2s and 1099 creations, multi-currency support, payroll options and contact management. Additionally, just like Quickbook, this is a cloud-based platform that you can access from anywhere and from any device.

Merchant Maverick Rating: 5 out of 5

The Best Use of Your Time?

Ultimately, you have to decide if managing your business’s financial reporting is the best use of your time. As a young business, you may be able to devote two hours of your time to keep up to date with your accounting, but as your business grows the responsibility and time commitment will only grow. Should you be focusing on your bookkeeping or on sales, or app development, or the reason you started your business?

The answer may not be as obvious as it seems. Maintaining your own books may seem tedious, but many entrepreneurs and small business owners see it as a necessity. By maintaining your own books, you have an intimate financial knowledge of your business, and it can help you foresee potential issues coming up.

If you do decide to get help on your bookkeeping from the outside, you should continue to review your books regularly (at least monthly), so that you don’t lose the context on the financial side of your business.

When it comes to outsourcing your company’s financial responsibilities, there are two types of financial professionals to consider: a certified public accountant (CPA) and a bookkeeper. Each have very different skills and rates and it would be up to you to decide if you want to retain one or both.

Bookkeeper

Bookkeepers perform day-to-day tasks like gathering and organizing employee timesheets, submitting purchase-orders, collecting payments from clients, preparing bank deposits and entering all financial transactions into whatever accounting software or recordkeeping software you use. Depending on if you hire from an accounting agency or through the classifieds, a bookkeeper might come with a wide range of skills. Study.com’s bookkeeping career guide lists as only needing a high school diploma as the minimal education requirement. However, there are opportunities for bookkeepers to obtain a bookkeeping certificate through the American Institute of Professional Bookkeepers. Certification bookkeepers will already know how to record costs, analyze financial statements and use the major software programs. Depending on the tasks and the market, a bookkeeper will charge around $25-$35 an hour.

Many small businesses choose to hire a part-time bookkeeper until they can justify hiring one full time. To find a bookkeeper, ask an accountant for recommendations or skim through resumes on the online job forum from the American Institute of Professional Bookkeepers.

Always ask for business references before hiring a bookkeeper – and make sure you talk to those references to see if they were able to perform the job at a satisfactory level. Remember, this is YOUR business you’re asking them to bookkeep for.

Certified Public Accountant

A certified public accountant (CPA) is someone who has been certified by a state and has passed all of the necessary exams and certifications to meet the state’s legal requirements. More often than not, CPAs have went to a four year college with a concentration in finance and accounting. CPA certification requires some graduate-level coursework and passing 4 CPA exams. States usually require accountants to complete at least two years of work experience before taking the certification examinations. The added certification and educational background of CPAs allow CPAs to tackle more complex and high-level tasks. Some examples are your quarterly financial reports, state specific tax filings, business analysis and processes and may even offer advice.

The typical cost of a CPA is around $100 to $300 depending on task complexity and the current market. Word of mouth is always the best when hiring a CPA but if you find yourself with no leads, check out the National Society of Accountants to find CPAs near you.

As as with hiring a bookkeeper – vette your CPA! Ask for business references, call or meet with those references and make sure they CPA is honest and trustworthy, capable and knowledgeable.

Things to Keep in Mind

Here are a couple of things to keep in mind regardless of which financial accounting route you choose:

  • Even if you outsource your business’s financial reporting and auditing to a bookkeeper or CPA, ultimately, you are still responsible for everything that gets filed with the state and federal government. That means if they make a mistake, you’re still responsible for the repercussions. That’s probably why they have Errors and Omissions (E&O) insurance It’s important that you are in constant communication with your financial accountants and that you review important documents before submitting them to the state or IRS.
  • The range of skills between a bookkeeper and accountant varies. Hire to best match for your company. If you are just starting out, you probably don’t need to hire a full-time CPA (and you should probably do the bookkeeping yourself!)
  • Determine where your time is best spent. Think about if you are able to and have the time to do your own accounting or to outsource. Where are you the biggest assett to your business and your clients?
  • An accounting system is more than just filing government required paperwork. It’s there to inform you about the health of your company and impact decisions so you can grow your business the right way.

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