Is It Time to Hire An Outside Accounting Firm?

As a business owner, how do you know when your business is ready to hire an outside accounting firm?

First, think about the capabilities of your current accounting staff as well as the current state of your operations and the goals of your business. Then ask yourself these questions:

• Are you missing deadlines filing forms or paying bills?
• Are you being forced to pay penalties because of late filings or payments?
• Are you spending too much time correcting mistakes in Excel spreadsheets or in QuickBooks?
• Are you spending too much time on accounting, time that is taking you away from your core business responsibilities and expertise?
• Are you operating your business without consistent access to timely reports, useful financial statements and insightful business intelligence?

Do you feel a little lost and out of touch with the latest tax and accounting guidance and regulations? Does that put you at risk of an audit, missed deductions or accounting errors?

• Has your business outgrown your own or your team’s accounting skills and infrastructure, impacting the efficiency of your operations and impeding your path to future growth?
• Are you looking to bring in new capital: including new partners, investors or bank financing? If so, you will likely have to complete an audit, implement new controls and reporting requirements.

If you answered ‘yes’ to any of these questions, it’s probably time to hire an outside accounting firm – because doing it yourself is costing you time and money better spent elsewhere.

An external accounting firm brings a level of expertise most small businesses simply do not possess. CPAs are proficient in multiple subject areas, including financial accounting and reporting, audit, and regulations, and understand the complexities and ramifications of current and proposed legislation. Their guidance can chauffeur your business through an array of choices and provide a roadmap for growth as well as tax-efficient suggestions to improve profitability. A few examples of what a good accounting firm can do for you:

• Transition your books from cash basis accounting to accrual accounting, which is based on generally accepted accounting principles (GAAP), the default standard for U.S. companies.
• Keep your firm compliant with all tax regulations and accounting and guidelines.
• Help scale your accounting function without having to add additional head count to your firm.
• Analyze and interpret your financial data and provide advisory support on current results, trends and future financial projections.
• Review your business plan and offer suggestions regarding financing options and current legislation which could affect your business.
• Assess your company’s tax efficiency and offer options to improve it.

Remember, building and running a business is hard work. As a business owner, you owe it to yourself and your company to seek specialized advice when the scope of your needs exceeds your own talents and capabilities, so you can concentrate on what you do best: growing your business and making a mark in your industry.