When You Would Benefit From Hiring an Accountant

Accountants play a key role in business. They keep your books in order, work with the IRS on your taxes and help you may key financial decisions. At the start of your business, you likely handled much of your accounting duties yourself. However, there are times during your startup and business process when you need a knowledgeable professional accountant.

When You Choose Your Business Structure

Every business structure has tax, investment and financial implications. If you want the simplest tax structure, you may choose the pass-through taxation of a sole proprietorship, partnership or LLC. However, you will have to pay self-employment taxes as well. Corporation profits are subject to dual taxation. The company has to pay taxes on every dollar of profit, and if the company distributes the profits, the individuals who receive shares have to pay taxes on their distributions.

Investors also shy away from sole proprietors, partnerships and LLCs. In fact, some cannot invest in these corporate structures at all. These individuals are much more apt to invest in corporations, especially if they have plans to go public in the near future. If you don’t need investors, this factor may not matter.

Business creditors and lawsuits can also target the personal assets of sole proprietorship and partnership owners. Some partnership owners have limited liability depending on how they were set up. However, LLCs and corporations have protections against this vulnerability.

During Business Expansion Periods

As your company expands, your accounting becomes more challenging, especially during tax season. You will need to make more important financial decisions, such as pursuing debt or using cash flows for your expansion plans, dealing with payroll and budgeting.

At this point, you need to delegate your financial duties so you can focus on planning. This delegation will prevent you from becoming overworked and making mistakes. However, hire the right professional for the job. Find someone with experience in finance, but also consider choosing someone with experience in your industry.

When You Need Funding

Banks and investors require very specific paperwork and records before approving funding. An accountant can help you prepare the necessary paperwork and build a strong case for these individuals and companies. In fact, hiring an accountant improves your chances of approval by itself. These individuals can provide both your financial history and projections for your future revenues and expenses. These professionals can also help you find the best funding option.

The right accountant is an asset for your business. Consider these and other circumstances when your business will benefit from an accounting professional.