Anybody who has ever run a small business can tell you that it’s a constant juggling act. You have to wear several hats every day to keep moving forward, including handling the financial side.
Some people can pick up a few small business accounting books and puzzle things out in no time. Others know when to hand things over to a professional. Then, there are the people in the middle who do a little of both.
Whether you’re just starting out or feeling swamped by your existing paperwork, you might be trying to figure out if you need to hire an accountant. Read on to figure out what type of small business owner you are, and whether or not you should do your own accounting.
Do You Have the Desire?
The first question you should ask yourself is if you have the drive to handle your business finances. If you love numbers and appreciate having control over your books, then desire is not an issue.
Keeping your own books can give you a sense of control and help you stay on top of your company’s finances. It’s an excellent way to avoid surprises and can help you manage daily operations better.
What if you hate math and dread balancing books? Your desire to do your own accounting is probably nil, and it might be worth handing things off. Keep in mind that hiring a professional might not be an option at first, especially if you can’t afford it. That doesn’t mean you can’t eventually hand off this hated task to somebody who loves crunching numbers.
Do You Have the Skills?
Understanding your business is one thing, but understanding the financial side is not always straightforward. You have to keep stellar records throughout the year, which requires a specific skill set.
- Do you understand what business records to keep and what information you need to have at tax time? Small business tax information can get complicated, especially if you have employees.
- Can you keep neat, thorough records? You must document everything, including sales tax if it’s part of your business model.
- Are you tech-savvy enough to handle everything including backups?
If you answer these questions in the affirmative, then you probably have what it takes to handle your books. Of course, things get especially challenging to work through taxes, so many business owners let professional accountants take over at tax time. There’s no shame in that!
Do You Have the Tools?
Being tech-savvy is one thing, but you also have to have the means to keep records straight. Proper booking software is a must, and that requires everything you use to communicate effectively, including payment methods.
Establish Invoicing and Payment
How do your customers pay for your goods or services? Many small businesses use multiple platforms to reach as many customers as possible. You also have to consider people who invoice you, like utility companies and suppliers. That means creating a system to keep everything straight.
Establishing a system for invoicing and payments is critical to your success. It needs to be accurate and efficient to keep everybody happy and allow you to maintain thorough records.
Bookkeeping Software
Some people get by just fine with an Excel document and obsessive logging, but bookkeeping software can save you a lot of time and headache. You have many options available, like Quickbooks, and many of them are available online for reasonable prices.
Bookkeeping software goes hand in hand with invoicing and payment. It helps if everything communicates directly so that you don’t have to mess with manually inputting information.
It’s also a solid investment for people who handle their own books but pass off the taxes to a pro. Most bookkeeping software can relay information to your accountant in a nice, clean package to make their life easier.
Hit the Small Business Accounting Books
What if you want to take care of your own books, but you don’t feel quite comfortable? There are several small business accounting books that you can use as guidance. Here are a few ideas to get you started.
- How Much Does It Cost To Make A Donut by Cassmer Ward
- Starting a Business: Quick Start Guide by Ken Colwell
- Small Time Operator by Bernard B. Kamoroff
- Accounting for Non-Accountants: The Fast and Easy Way to Learn the Basics by Wayne Label
You could also pick up some classes through your local college, library, or business organizations. It’s possible to learn everything you need to keep your small business accounting books in line.
When to Hire a Professional
Knowing when to consult small business accounting books and when to hire an accountant is important for any business owner. The bottom line is that errors can cost you a lot, especially if they are tax-related. Unless you are adept at handling the books, a professional can do it faster and cleaner.
Hiring an accountant can take a load off your plate beyond tax season. If you’re struggling to manage your business and can’t find relief, a professional CPA (certified public accountant) or outsourced CFO might be the answer. They offer a range of services. including:
- Maintaining compliance with government standards, like audits and compliance reports.
- Analyze finances for patterns and identify potential savings.
- Submit regular financial breakdowns to you, like quarterly reports.
- Preparing financial data for any purposes, including finding investors.
- Manage payroll for employees.
Professional accountants understand the ins and outs of small business finances, which can offset the investment in their services. You don’t even have to hire a full-time accountant for your business. It’s possible to contract services with an individual or company to handle specific tasks, like taxes or quarterly reports.
Final Thoughts
As a small business owner, you have dozens of decisions to make every day. While it’s never easy to start or maintain a company, it can be rewarding when it’s your passion. That doesn’t mean you have to be passionate about every aspect of running a business, like the financial side. Knowing when to hand off your small business accounting books could be the best decision you make any day.