Having an entrepreneurial spirit often comes with the feeling that you want to-or have to-do it all. That may work fine for you in the beginning, but once you get past the startup phase you might start to wonder whether it's time to invest in additional help. There are several cases when it makes sense for small businesses to hire accountants, some more obvious than others. How do you know if it might be time to hire a CPA for your business?
You're Worried about Audits
If you have nagging fear that the IRS is going to pay you a long, involved visit, you're not alone-especially if your knowledge of tax laws is limited. Hiring an accountant to wade through tax laws on your behalf may find you sleeping easier at night, so it may be worth investing in someone who makes sure your business pays all the taxes it owes, on time, every time.
Additionally, that accountant may be able to identify additional tax deductions you weren't aware of that help lower your tax bill, and create a record keeping system (cross link here) that keeps you and your business organized whether it's tax season or not.
You're Not Growing Your Business
Another reason to consider hiring an accountant is if bookkeeping, accounts payable and other record keeping require so much of your time that you're not able to interface with your customers or your staff.
When critical administrative tasks keep you from establishing your brand and growing your business, it may be time to hire a CPA. In the process of working with your accountant, you might discover new ways to increase sales, like being able to offer lines of credit to your customers who might otherwise not be able to do business with you, or only do a limited amount of business.
You Question Your Profit Margins or Business Structure
You should be able to answer questions around how much additional time and/or money you need to invest in your business before it sees a profit, or at least be able to determine that answer quickly. Accountants can help you do just that.
They're also able to analyze and interpret your financial data and make recommendations about business structure-should you incorporate or remain a sole proprietorship, for example-and when it is or isn't time to expand your business as well as the best ways to fund the expansion. Not sure whether to lease or purchase your equipment? Your CPA can tell you which path makes the most financial sense for your business.
You're Not Good with Numbers
Spending too much time crunching numbers is a sign it's time to hire an accountant, but is spending too little. Whether bookkeeping doesn't come naturally to you or you tend to avoid the task, you'll benefit from working with an accountant.
Depending upon how much or little you're capable of doing or want to do, look for a CPA who can also handle your payroll needs, tax planning and prepare financial statements for your business. When you get to the point where you comfortable learning or doing more, you can work with your accountant to create a record keeping and reporting system you'll actually use.
You're Paying Too Much
It's easy for small businesses to suddenly find they're paying too much: too much to vendors, too much to employees, too much even to themselves. In order to negotiate the best deals for your business and set the right payroll rates, you need a solid understanding of your company's financial picture.
Otherwise, you'll learn the hard way that your business really isn't generating enough revenue to support those pay rates. An accountant can help you determine the optimal pay structure that supports your business objectives and may also be a valuable resource when you're determining what benefits to offer your staff.
 | The basic accounting equation elements are simple concepts you need to grasp in order to run a small business. Accounting is based on the concept that a balance must be maintained through debits and credits. |
 | What is a CPA? "CPA" stands for "Certified Public Accountant," and you would go to a CPA for tax advice. However, not everyone who provides tax advice is a CPA. The three letters "CPA" can mean a lot if you need any kind of tax or business help. |
 | Need to know how to prepare a general ledger? Wondering if you're properly recording your small business expenses and credits? The following advice will help you set up your general ledger sheets properly. |
 | You'll have to read a balance sheet if you ever consider going into venture capitalism, investing in small businesses or getting involved on a corporate level with accounting. |
Accounting for outstanding checks can be time-consuming and troublesome, but you'll want to make sure you do so on a regular basis to prevent serious balance sheet reconciliation problems later. |
