When a business is small, managing the finances yourself can seem perfectly reasonable. You may send invoices, track expenses, reconcile your bank account and prepare information for tax season.
But as a business grows, its financial needs become more complex — and there comes a point when doing everything yourself can cost more than hiring professional help.
Here are five signs that it may be time to bring an accountant into your business.
1. You’re Spending Too Much Time on Your Books
Business owners should understand their numbers, but they shouldn’t necessarily spend evenings entering transactions, reconciling accounts or trying to determine why the books don’t balance.
If accounting tasks are taking time away from customers, operations, sales or business development, it may be time to delegate them.
An accountant can take responsibility for the financial processes while giving you the information you need to remain in control.
Your time has a value too.
2. Your Business Is Growing, but Your Finances Are Becoming Harder to Manage
Growth is good — but it also creates complexity.
More customers can mean more invoices and receivables. More employees mean additional payroll obligations. More purchases create more expenses and payable. Expansion may also introduce new tax, cash-flow and reporting requirements.
At this stage, simply knowing how much money is in the bank is no longer enough.
Reliable accounting helps you understand whether growth is actually translating into stronger financial performance.
3. You Don’t Know Exactly How Profitable Your Business Is
Revenue is not profit, and profit is not cash.
A company can have strong sales and still experience declining margins or cash-flow problems.
You should be able to answer questions such as:
● Which products, services or projects are most profitable?
● Are expenses increasing faster than revenue?
● How much do customers owe the business?
● What are the company’s upcoming financial obligations?
● How does actual performance compare with the budget?
If your accounting system cannot provide reliable answers, professional accounting support can help turn financial data into useful management information.
4. Tax Deadlines and Compliance Are Becoming Stressful
As a business grows, so can its compliance responsibilities.
Corporate income tax, GST/HST, payroll remittances and other filing requirements can create significant administrative work.
Good accounting throughout the year makes tax compliance easier because the records are already organized, reconciled and supported.
Rather than treating accounting as something to deal with at tax time, businesses benefit from maintaining accurate financial information throughout the year.
5. You Need Financial Information to Make Bigger Decisions
Should you hire another employee?
Can the business afford new equipment?
Is it the right time to expand?
Should you increase prices?
Can the company support additional debt?
These decisions shouldn’t be based solely on the current bank balance.
Accurate financial statements, cash-flow information, budgets and forecasts can help business owners evaluate decisions before committing resources.
And as the business becomes more sophisticated, it may eventually need more than bookkeeping. A Fractional Controller can provide higher-level financial reporting, budgeting, forecasting, cash-flow management and financial oversight without the cost of hiring a full-time Controller.
Accounting Should Help You Run Your Business
Hiring an accountant isn’t only about keeping records or filing taxes.
The right accounting support should give you better visibility into your business and more confidence when making financial decisions.
At Lilia Chiper Accounting Taxes Inc., we provide accounting, bookkeeping, tax and Fractional Controller services to businesses across Canada.
With more than 20 years of accounting experience, we provide professional, cloud-based support tailored to the needs of each business.
Need help getting your accounting under control?
Contact us to discuss the accounting support your business needs.
Lilia Chiper Accounting Taxes Inc.
Accounting • Tax • Fractional Controller
Serving businesses across Canada
