Many small businesses choose to act as their own accountant. In many cases, they take the time to enter all of their debits and credits, manage their Accounts Payable, track their Accounts Receivables, track their vendors, and everything else that you need to do to run your small business efficiently.
But when should a small business actually hire an outside accountant? When do you reach that tipping point in your business growth?
This article offers some advice for when you reach that threshold to outsource your accounting processes.
You Miss A Deadline for a Payment
We’ve all done it. You thought the deadline for that tax bill was the 31st and not the 15th of a particular month. Maybe you paid your business credit card a few days too late and incurred an additional fee that you just didn’t expect. Or perhaps you misplaced your phone bill, your power bill, or your business magazine subscription invoices and can’t pay them at all.
You Don’t Estimate Your Quarterly Taxes Correctly
For most small businesses, paying too much in quarterly taxes can greatly disrupt your month-to-month cash flow. If you’re trying to estimate your quarterly taxes yourself, it can cost you hundreds or thousands of dollars more than it should because the Tax Code can be extremely confusing.
In fact, Albert Einstein once said to his accountant, “The hardest thing in the world to understand is income taxes.” His accountant replied, “There is one thing more difficult, and that is your theory of relatively.” Einstein responded, “Oh, no, that is easy.” But then his wife commented, “Yes, for you.”
You Are Overwhelmed or Over Your Head
Even though there are online accounting software programs available for those who choose to do their business taxes themselves, you can easily get overwhelmed or over your head trying to figure out how to do your own taxes. Even with software that takes you through each entry a step at a time, it can be confusing and frustrating. Accounting is a very specialized field that is best left to the experts. There is no substitute for a one-to-one relationship with a “real” person; someone who works with small businesses day in and day out on their accounting and bookkeeping needs.
You Don’t Keep Proper Records
If your idea of keeping receipts is throwing them in a shoebox and sorting them out at the end of the year, you’re in for a rude awakening at tax time. Lack of a proper paper trail for invoices, receipts, subscriptions, and pay stubs is a recipe for tax preparation disaster.
You Want To Get Your Taxes Done Without Being Audited
If you got audited recently and did your taxes yourself, Uncle Sam is literally sending you a notice that it’s time to get professional help. Even the best accountants can get audited from time to time, but most have a far better track record than those who do their own taxes.
You Want To Get a Bigger Refund.
If you think you should get a bigger refund, are frustrated that you didn’t get more than you thought you could, or you forgot to deduct a huge medical expense that surpassed your deductible, talk to an accountant about your overall tax planning strategy.
You Think Like These Guys
Over the years, I’ve had one client after another come to me and say things like:
- “I didn’t think an accountant could make that much difference in my taxes…”
- “My wife is pretty good with our checkbook, so I asked her to do my tax returns…”
- “Paying someone seemed ridiculous until I got audited…”
- “I never thought I’d need an accountant, but we’ll try it for a year and see what happens.”
Have You Enjoyed These Tips About Why Should a Small Business Hire an Accountant?
If you want to discuss why I should be the accountant you hire, let’s have a consultation. Please contact me using our online form to discuss your bookkeeping, accounting and tax planning for 2017 and beyond.
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