Like most small business owners, when you first open your own business, you probably handle your own accounting, and as a professional accountant, you can stay on top of your books for a lot longer than the typical business owner. That said, as your business grows and your needs change, you may need outside help. Here’s a look at a few of the situations where you may want to outsource some of your accounting to a third party.
You Need an Objective Opinion
When you’re a small business owner, you have to make all kinds of decisions. Should you hire extra people? Should you try a new marketing channel? Should you take out an extra loan? The answer to a lot of these questions goes back to the numbers. You have the ability to crunch the numbers more effectively than most business owners, but it can still help to get an outside opinion.
For example, if you want to evaluate your client relationships from a financial perspective, an outside accountant can help you generate figures related to the cost of acquiring clients and the lifetime value of clients. Then, you can use those numbers to help you decide which clients to keep and which to cull. It can be hard to be objective when you work through this process on your own.
You Want a Specialist
In other cases, you may want outside help from accountants with experience in different specialties than you. Say you focus primarily on tax prep. You probably feel pretty confident about doing your own taxes, but you occasionally may want help from an accountant who’s studied business accounting. This person can help with cash flow forecasts or creating other key metrics to ensure your business is running smoothly.
To give you another example, if you suspect an employee of embezzlement, you may want to hire a forensic accountant. These specialists can look through your records to figure out when and where the funds went missing. These are just two basic examples, and there are all kinds of situations where you might need to hire an accountant who has experience or training in different areas than you or the rest of your team.
You Don’t Need a Permanent Employee
Often, if you need help with a specific type of accounting in your business, you can hire a permanent employee with training in that niche. But if you don’t have the need or the budget for a permanent position, you may want to hire an outside accountant as a consultant. For instance, imagine you’re thinking of taking on international clients. To ensure you understand the tax implications it could have on your firm, you hire a consultant in international tax law.
You Plan to Go Public
Although it’s relatively rare for accounting firms to go public, leviathan firms such as Ernest and Young, Deloitte, and PricewaterhouseCoopers have all made the plunge. If you decide to take your firm in the same direction as these giants, you need to hire outside help. In particular, if your company is traded on the stock markets, you need to make disclosures that include financial statements created by an outside auditor.
Typically, accountants handle their own accounting, but there are all kinds of situations where you may need to hire or consult with another professional. If you want an outside opinion, need objective disclosures, or want help with a particular aspect of running your business, you probably need to work with an accountant from outside your firm.