For most people an accountant is someone who solves problems you didn’t know you had in a way you don’t understand. Well, maybe that’s not entirely true. But as with most humor and fun, there is an aspect of truth to it.
Many small business owners start off by wearing the accountant tag themselves but as operations expand, money starts to come in or even when it starts to go out, the services of a professional accountant are required. Are your financial statements incomplete or imprecise? Do you sit in front of QuickBooks wondering where to start off? These are indicators that it is time to start looking for an accountant.
A Firm Or An Inside Accountant?
Many small businesses don’t really need a full or part time employee. Why? Their volumes of transactions aren’t high enough to hire a paid in-house professional. But if you can afford to keep an accountant from the start then there’s no harm in it. It is better than handing over your invoices and ledgers to a tax preparer at the year end.
On the other hand, hiring a professional accounting services firm could cost you substantially less than hiring a salary based professional. These firms mostly provide a fee-for-service model, which means you only need to pay for the specific services you need.
Out-house financial firms usually provide the following services:
- Preparing financial statements (balance sheets, income, and cash statements)
- Tax return preparation
- Supervising the accounting and financial department
- Handling investments
Every company is different; meaning a business owner can expand or contract the scope of services he might be looking for. An accountant firm may offer an hourly rate or a pay-per-service schedule.
As the business gradually expands, so do their financial transactions and operations. This might be the time to go for a full-time in-house accountant. The setback with financial firms is that their cost increases with the growth of business, when operations grow big, it might be financially better for you to hire an accountant employee.
Normally, in-house accountant’s responsibilities include:
- Cash and treasury management including bank reconciliation
- Preparation of financial statements
- Fixed asset accounting
- Payroll accounting
- General account maintenance
When bringing expertise on board, which you don’t currently have, choosing to discuss the compensations last is the best option. The employee will be a part of your company, so make sure you hire the best.
When choosing an outhouse financial firm or an in-house accountant, look for qualifications such as:
- Certified Public Accountant (CPA)
- Certified Management Accountant (CMA)
- Certified Valuation Analyst (CVA)
- Chartered Accountant (CA)
- Accredited in Business Valuation (ABV)
- Personal Financial Analyst (PFA)
- Look for majors in finance as well
Choosing an accountant firm or an employee is an indication that the business is serious about its operations and its ultimate aim is company growth.