Finance Software

When to Hire a Small Business Accountant

Published by in Accounting

Accountants are like parachutes – you want to have one ready to go before you actually need one. For a small business, there are a few ways to make sure you’re ahead of the curve. The desire to be covered when you need the help doesn’t mean you have to sign-up with an accountant the day you make your first sale.

When to Hire a Small Business Accountant

Accounting software and tax preparation software – like TurboTax – can keep your business running like a well-oiled watch, as long as things don’t get too complex. But what happens when you’ve got two offices, fifteen employees, a van, and $1 million in annual sales? Where’s the line?

Knowing when you’ve hit the ceiling

When The Man, as represented by that guy from the IRS, shows up at your door, you know you need someone on your side. But something led up to that visit, and you could have seen it coming. Maybe your income jumped in the last year, or you had a lot of itemized deductions on your taxes, or someone pumped cash into your business.

All of these sudden shifts – and many more – can flag your returns. It’s not that the IRS thinks you’re cheating – it’s simply that something drastic has changed and therefore things might be wrong.

Keep in mind, you’re unlikely to be audited. In 2013, fewer than 2% of businesses were audited, according to the IRS. But why push yourself into the danger zone without a backup plan? The best backup plan is a specialist.

What accountants can do for you

Apart from helping you through legal and governmental hurdles, accountants can also help your business grow. One of the most popular times to bring an accountant on is when your growth starts accelerating. At that point, you’re falling behind on your financial bookkeeping, you’re hiring more people than you ever expected, and you’re making purchases that will have a tangible impact on your taxes.

You may also be in the market for a loan, either from the bank or from private investors. As soon as you think you might be talking to other people about money, get an accountant. Accountants can help you organize your financial thoughts, explain the logic of your business in the terms of finance, and just generally help you make the right choices for your future.

If you don’t know whether to rent or lease, to hire contractors or new staff, or to take a loan or issue equity, you can get a huge boost from hiring an accountant.

In short, accountants are your friends whenever there’s stress in the business. If things are going really well or really poorly, accountants can help you through the weeds – or the carrot patch, whatever the nice version of weeds is.

Accounting software’s role

Before you sit down with an accountant, do yourself a favor and get your financial house in order. There are plenty of low or no-cost solutions out there to make your accounting easy. Wave, for instance, offers free accounting software and a free app to make entering receipts easy.

There are plenty of other accounting options out there, but if you think you’re going to start working with an accountant, get advice from them first. Many software packages give accountants access to your books remotely, making it even easier for you to keep your finances clean and crisp.

Popular packages with accountant access include QuickBooks, FreshBooks, and Xero. Xero actually offers a listing of accountants that work in the software’s environment, potentially saving you some time hunting an accountant down.

Final thoughts

If you do think you need an accountant, ask around for recommendations. While listings are useful, there’s nothing like hiring someone that you know is trustworthy.

To recap, you should work with an accountant when:

  • The government comes calling
  • You’re falling behind on bookkeeping
  • You go through a hiring binge
  • The business is making long term purchases
  • You’re trying to raise funding

If your business is still in the early stages, software might be the easier bet. For accounting software options, check out Capterra’s accounting software listings.

Header by Abby Kahler

Looking for Accounting software? Check out Capterra's list of the best Accounting software solutions.

About the Author

Andrew Marder

Andrew Marder

Andrew Marder is a former Capterra analyst.



Comment by Sariah Meagle on

It’s reassuring that you said that it’s not that the IRS thinks I’m cheating with my taxes since as a small startup business the tax calculations can be hard to do because the company is new and hiring a small business CPA will help prove our honest mistake last six months ago. I do like that accountants can also help my business grow as you mentioned since I can have a hard time keeping track of where the money goes sometimes. You’re right about stating that accountants are my friends whenever there’s stress in the business, so I should really think of hiring one from a good firm to help me out here.


Comment by James Knight on

Accounting is often called “the language of business.” Why? Because it communicates so much of the information that owners, managers, and investors need to evaluate a company’s financial performance. These people are all stakeholders in the business, which is to say they’re interested in its activities because they’re affected by them.

Comment by Lexie Stegemiller on

Accountants are the best and definitely a necessity! Ultimately they want what’s best for their clients, at least that’s what a good accountant would want haha. Thanks for your post 🙂

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