When Is It Beneficial to Hire an Accountant for a Small Business?
As the owner of a company, it is crucial that you have a certain level of comfort with the state of your finances and that you plan for your financial future. But is it worth your while to hire a small business accountant in Union City, NJ?
One of the first decisions you’ll need to make when starting a company is figuring out who will handle your finances. You can try to take on your company’s financial management tasks yourself, but you will quickly find out that this is a bad idea for anything beyond a sole proprietorship, and even then it behooves you to have a financial specialist to work with if you don’t have the necessary training to take on those tasks.
As soon as you have enough money to afford it, it’s a good idea to outsource the task to someone else. You shouldn’t waste your energy on your new business by getting bogged down in your numbers—you should use it to develop your product and your brand.
The main options small business owners have to get some financial assistance is to outsource either to a certified public accountant (CPA) or a bookkeeper.
When a CPA makes more sense
There are benefits to working with both CPAs and bookkeepers, but there are some particular situations in which you’ll be better off seeking out the services of the CPA.
The biggest benefit of working with a CPA is that they’re capable of handling much more complex financial work than a bookkeeper. Bookkeepers are really only meant for basic, day-to-day financial activities, including gathering timesheets, submitting invoices, collecting customer payments, preparing bank deposit statements and tracking your books and records. If that’s all the assistance you need, then sure, go for the bookkeeper—you’d likely be wasting your money on an accountant.
However, accountants can specialize in areas such as tax preparation and accounting, nonprofit financial work, mergers and acquisitions and more. The best strategy in most cases is to work with a bookkeeper on an ongoing arrangement, but to bring in an accountant any time you have a high-value, complex project that is beyond the bookkeeper’s training or scope of work.
Accountants can assist you with developing quarterly financial reports, which is highly beneficial if your bank requires you to provide these reports or if you’re submitting for a government contract. They can also help you with the process of filing and preparing your taxes, working on ongoing or individual advisory issues or assisting you with long-range financial planning. It’s much more beneficial to outsource this work until your company is doing at least several million dollars in sales on an annual basis.
Interested in learning more about the difference between a CPA and a bookkeeper and when it makes sense for you to go with an accountant for small businesses in Union City, NJ? We encourage you to contact the team of financial professionals at Kedean’s Generation today with any questions. We look forward to speaking with you soon!
Categorised in: Accounting Firm