As a founder or business owner, it may be easy for you handle most of the accounting tasks early on, but eventually you will need to hire a professional accountant. The question is, how do you decide whether that resource should be internal or external? What are the signs?
These days, most companies can find the right support for all Finance and Accounting needs by partnering with a full-service accounting firm. By hiring external resources, you can expect to receive the services of an entire team of experts while saving costs by not having to pay payroll taxes or benefits. Additionally, you are eliminating the risk of hiring and training an employee only to have them leave and take their knowledge with them.
An outside advisor can also help with most of the important decisions your business will face. The fact that an accounting firm works with many clients can help give you comfort that the advice they are providing is based on a wide range of experiences and knowledge compared to only that of internal team members.
Below are some situations when an external accountant can support your company at various stages of its lifecycle.
When You Are Starting Your Business
The initial stages of your venture are especially significant. To set your business on the path to success, you will need to build the right financial infrastructure to scale – this can be done with the right external resource providing their expertise and process knowledge.
An accountant can assist you in:
- Choosing the correct type of your business structure, such as C-Corp, S-Corp, Partnership, LLC, or an LLC with an election to be treated as any of these structure types.
- Establishing your business EIN (Employer Identification Number) and whatever state licenses or legal requirements
- Selecting the best accounting system for your business such as QuickBooks Online or Sage Intacct
- Creating a business plan
- Creating a tax strategy
- Introducing you their network of trusted colleagues, attorney, banker, business leaders, etc.
An outside accountant can provide the right advice on how to run a financially successful business.
When You’re Focused on Saving Time on Recurring Financial Duties
Time is our most precious resource and entrepreneurs should be focused on growth, not completing month end reconciliations. By hiring an external accountant, you can have the confidence that your back-office responsibilities are handled which will allow you to concentrate on operating your business.
An accountant can support you by owning various daily tasks from tracking expenses, reviewing financial activity, supporting bill payment flows, payroll, and more.
An outside accountant can bring a team which can support your business year-round and without disruptions or subjecting you to vacations or risk concentration of an internal individual.
When You Need to Create or Update your Business Model
We have written extensively about the importance of having a strong financial model to guide and track your progress. By bringing in an outside advisor, you will be able to leverage their experience to ensure you have the right forecasts and right foundation when compared to that of an internal resource with limited scope. An external accountant can support you with your major financial decisions such as determining market strategy, investing in new product lines, acquiring a new business, and minimizing your operational costs.
When You Are Raising Capital or Applying for a Loan
Investors and banks will require financials and projections to give them comfort that they will be paid back with interest to achieve their required returns. The right advisor can help you tell your story and give confidence to outside parties that you will be able to achieve your goals. As these transactions are not part of your normal course of business, using an advisor may be a much better value and higher quality solution than hiring an internal employee.
When Handling Tax Requirements
Most businesses consider tax season a business headache laden with possibly expensive errors. With constant changes in Federal & State tax laws, you need the guidance and insight of talented tax accountant. By hiring an external accountant that focuses only on tax work, you can be confident that your tax strategy is being executed and optimized.
Getting the Right Accountant
As you can see, an outside advisor can be beneficial for your company when compared to hiring an internal resource. The right external accounting team can bring their vast knowledge and experience to all of the above situations to allow you to focus on growing your business while maximizing the back-office efficiencies and compliance.
Want to know more?
Here at AccountFWD, we’re a tech-enabled public accounting firm offering outsourced CFO, accounting and tax services. We provide the support our clients’ need for all things accounting and strategy with personalized support and concierge level service. If you are interested about learning more about the benefits of outsourcing, we’d be glad to help you. Get in touch with us today to learn more. Send us a note, schedule a time to connect, or give us a call 954-686-8687.
