Do I Need a Personal Accountant? A Guide for Small Business Owners

Choosing the right professional could help you achieve financial security, whether you’re running a business or investing money for your future. You should consider your financial complexity, the time you can devote to financial management, your comfort level with financial tasks, and your long-term business goals or personal financial health. Alternatively, exploring alternatives such as accounting software, bookkeepers, or financial management education can provide cost-effective solutions for straightforward financial situations. Bookkeepers can manage many day-to-day financial tasks at a lower cost than accountants. However, they may not have the expertise to provide strategic financial advice or navigate complex tax issues.

Facilitating growth

Small business owners can initially use Excel and benefit from various tips and tricks to manage their financial tasks in the short term. Every small business owner gets to the point where they worry about the tax implications of their business, as well as having to handle accounting and other obligations. Trying to juggle these tasks single-handedly can lead to a lot of inefficiency and chaos. For this reason, many opt to hire a certified public accountant Certified Public Accountant (CPA) who can handle these tasks on the behalf of your business. A personal accountant may be helpful if you’re an entrepreneur or you have a lot of personal financial issues to deal with.

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However, they alone won’t replace the expertise of a professional accountant. Some accountants may be more responsive than others, depending on the size of their operation — same as you. A smaller firm may offer more Accounting for Churches personalized or niche services, while a larger accounting firm might provide a wider range of services and deeper expertise. When you open a small business, you may try to do everything — manage finances, HR, sales, marketing, product development, and more because you do not have the staff to help with everything yet.

• An accountant without CPA certification cannot sign tax returns on behalf of a client, but they can prepare them.
• Talking to your CPA or accountant before starting a new business is generally a good idea.
• Bookkeepers can manage many day-to-day financial tasks at a lower cost than accountants.
• Accounting.com is committed to delivering content that is objective and actionable.
• These credentials also typically require application fees, exam fees, and renewal fees, which can total more than $1,000 per certification.
• An audit can be stressful and time-consuming, and you will definitely want to have an accountant on your team if this happens.

Do I Need a Personal Accountant? A Guide for Small Business Owners

When a small business needs a business loan, an accountant can help increase the chances that you will get one. They can give the bank facts and figures to help back up your need for the loan and ability to pay it back. Plus, having an accountant shows banks that you are serious about your business, and that alone can sometimes help you get a loan. An accountant can help you select the loan to apply for, too, and tell you if the interest rate, terms, and conditions are good for you.

Sole ownership means you might be able to write off some of your living expenses on your taxes. You also will be using your own credit score for purchases and loans instead of having a credit score for your business. While some business owners might attempt to handle accounting tasks based on their own experiences, this isn’t necessarily recommended as there can be a larger overall risk of error. Licensed CPAs can help the business plan tax strategies to comply with tax laws and save money where possible.

Sure, you may have taken an accounting class or two back in high school or college. But even with that experience, you may not be comfortable taking on the task of accounting for your business. If you do indeed have a mid-size business, then you might need a higher level of accounting and bookkeeping assistance compared to a small business in your industry. Start-ups and established SMBs alike can benefit from outsourcing their accounting and bookkeeping tasks. However, in general, larger and more established companies need a different level of assistance than smaller companies and start-ups, and each company may have different financial goals. Yes, having an accountant is crucial for managing your finances effectively and ensuring compliance with tax regulations.

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And, that price can go up depending on what services your business needs. Sometimes a new business just needs some help getting organized with its income and expenses. Maybe there’s not a tremendous personal accountant amount of transactions (or there are), but little or none of it is being recorded properly. Individuals should seek the advice of their own tax advisor for specific information regarding tax consequences of investments. Investments in securities entail risk and are not suitable for all investors. This site is not a recommendation nor an offer to sell (or solicitation of an offer to buy) securities in the United States or in any other jurisdiction.

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Ensuring your taxes are paid promptly and accurately is key to keeping your business running smoothly, so it can help to have a tax planning expert. Accountants can also analyze your financial statements and clarify where you might be able to reduce expenses and increase profits. This can help you develop strategies to grow your business more efficiently. Understand the personal accountant’s pricing structure, including any hourly rates, fixed fees, or retainer arrangements. In addition to the complexity of your business’s finances, it’s essential to consider your own financial expertise and the time you have available to devote to financial management tasks. An accountant can find additional tax breaks that apply to your business and help you avoid penalties.