For small businesses, hiring an accountant is a big decision. Often, newer business owners ask the question, “Do I need an accountant for my small business?”
Many entrepreneurs and small business owners do their own books. There’s nothing wrong with wearing all the hats if the business owner is equipped for the work. However, a professional accountant can offer excellent counsel and help small businesses find efficient ways to move their business forward. This is especially true when the business owner does not have an accounting or financial background. An accountant brings a wealth of knowledge and experience that people outside the field simply don’t have access to.
Any small business can benefit from the expertise a fantastic accountant will offer. That doesn’t necessarily mean that every small business needs one to succeed, as some business owners have accounting in their own background that will help them gather insights. However, some business owners who start out doing their own books find they really need some help as the business grows.
John Savignano, CPA, has advice for small business owners who are deciding whether they need a CPA to help with their success. Savignano runs a highly successful firm in New York and is an adjunct professor at Fordham University. He works with some of the leading businesses in the world, and he’s also teaching future CPAs how to do accounting for small businesses and private clients. Savignano says: “I try to teach these kids for real-world experiences. It’s not only about spreadsheets; it’s about helping clients solve problems, working with clients, and becoming part of the team. And it’s not 100% accounting. It’s things other than accounting, like working with people, building relationships, and building networks.”
Do I Need an Accountant for My Small Business?
This is a common question that many small business owners ask. There’s no universal right answer. Some business structures and models have less complicated accounting. Other businesses might have very complicated accounting, but the business might have someone in-house who can fully handle the work.
The real answer is that it depends on the specific circumstances of that business.
Is there someone in-house who has the expertise to manage the accounting for that business model?
Is the accounting needed very simple or exceptionally complex?
Does the task of accounting take the business owner away from running the business to the point that it’s an obstacle?
Many small businesses will benefit from hiring an accountant. Professional accountants are highly efficient and understand their industry. They offer professional counsel on topics that a small business owner might not be well versed. But most importantly, they act as a member of the team that helps the business understand insights and make better decisions for future growth.
An exceptional CPA offers more than just accounting. As John Savignano explains: “When I meet new clients and new people, my background is not the typical background. I don’t like telling people I’m an accountant … I come more as a businessperson and try to help people solve their business problems and make the process a little bit more enjoyable.”
Reasons to Hire an Accountant
There are a few reasons why it may be time for a small business to find an accountant:
- Accounting processes take a great deal of a business owner’s time. Business owners need to recognize when it becomes more efficient to delegate tasks to an expert. A CPA can often accomplish accounting tasks more efficiently and with greater accuracy than someone who is not trained in the field.
- A business owner may benefit from gaining greater business insights. Accountants don’t just crunch numbers. They can help businesses understand the market, reporting, and find key indications to help in various decisions for growth.
- Sometimes, the challenges are too complex. If the person handling accounting is having a difficult time understanding the complexities as the business grows, an accountant can help.
Hiring an Accountant to Set Up a Small Business
Many small businesses can benefit from hiring an accountant before they even launch. A CPA can help compile the business plan that’s necessary if the organization needs any type of funding.
An accountant can also help the business set up the business structure (corporation, LLC, sole proprietorship, etc.). They can work with the incorporation process and help to set up the structure that’s best for the business model. Savignano shares how he approaches this task: “You’ve got to be in your client’s shoes in terms of what they’re faced with. And they may not even know the problems. But if you can help them foresee some of the issues or the trends, that’s what my focus is. That’s why I don’t like accountants, because they just focus on numbers and boxes. They’re losing sight of the big picture. When I meet with clients, I bring up topics that they weren’t aware of, or that they had in the back of their minds but they didn’t know how to communicate it or bring it to the forefront to deal with it.”
Hiring an accountant to help structure the business from the start gives the business an advantage in planning. CPAs are well versed in all of the legal and regulatory requirements, so small businesses and startups aren’t blindsided by unexpected costs that eat into their startup capital.
Whether a small business needs an accountant will depend on the situation, business model, and that specific business owner. In most cases, though, businesses benefit from the expertise offered by a reputable firm that acts as another member of the business’s team.
