When most small businesses open their doors, they are prepared to wear many hats to keep costs down and grow their business. As a result, one of the roles small business owners take on is accounting. This strategy may work for a short time; however, there will come a moment when it becomes clear that it is time to engage with a professional. This moment usually arises when managing and organizing your finances becomes more of a dreaded task than a role you look forward to, and you cannot seem to find the time or have the knowledge to manage your books (sounds familiar?). The GOOD NEWS is there are several cost-efficient options for small business owners. You can get professional assistance in the accounting area and still remain within their bootstrap budget. Here are some quick tips on deciding whether you are ready for an accountant.
What should ALL Accountants Know?
- They should have a general background on your company’s compliance issues, such as taxes and payroll.
- They should have knowledge of the general day-to-day accounting transactions. such as accounts receivable, accounts payable, bank reconciliations, and running payroll.
- They should be familiar with the concept of “booking” and with what it involves, like writing journal entries to adjust financial statements.
- They should be honest with their title and professional experience and be able to explain it easily. An accountant can have many titles including Professional Accountant, Certified Public Accountant (CPA) and Enrolled Agent (EA), and/or functional designations such as Certified Bookkeeper (CB), Chief Financial Analyst (CFA), and Chief Management Accountant (CMA), just to name a few.
Which Accountant is Right for You?
In today’s revolutionary, technology-based accounting world, the immediate need for a more sophisticated accountant is at high demand. This need is creating the evolution of the Collaborative Accounting Team, which may include the following:
- An in-house (or outsourced) accountant/financial administrator who has been trained on the company’s electronic accounting system and maintains the day-to-day accounting functions (this person can be the business owner and/or well-trained administrative staff).
- An external accounting/financial consultant (typically less expensive than a CPA) who is proficient in the various technologies and aspects of your business’s accounting systems (ie.QuickBooks ProAdvisor) and performs a monthly financial review of your entire accounting infrastructure, including the accounting platform, accounting workflows/processes, and financial statements.
- A CPA or EA who can provide tax planning, tax filings, and tax representation. It should be a high-level business consulting/coaching who can audit financial statements (CPA only).
It takes a village to build a successful small business and the same applies to the business’s financial team. I have witnessed great success and growth from small businesses that have taken the Collaborative Accounting Team approach. I encourage you all to take the next step in growing your business by building a strong accounting team which I am certain will have a significant influence on your company’s overall success!