Do i need an accountant

Knowledge Sharing 19 July 2021

do i need an accountant?

Can I Do My Small Business Accounting Myself?

Just how much do you know about accounting? Do you understand the difference between single entry and double entry bookkeeping systems? How about the meanings of FIFO or LIFO? What’s an Income Statement? If you can’t answer these questions, and you feel you should be able to, or maybe some of this terminology has come up in conversation at your business, then maybe it’s time to bring in an accountant.

Question 2

Am I Tech Savvy?

Perhaps you use computer software everyday, and you play with some apps from time to time, but don’t consider yourself an ‘expert’? This may not have to be a problem when it comes to accounting software. Chances are, you’ve got other things to focus on anyway, like selling your product or service. However, there are very user-friendly accounting software systems out there, like EBI which are meant for people without accounting experience. You want a program that can easily keep track of your invoices and expenses, as well as generate income statements and other reports. Accounting software might be a place for you to start, before hiring an accountant.

Question 3

What Can an Accountant Do for Me?

Do you understand exactly what an accountant can bring to the table? This can help you decide on whether it’s worth hiring one. An accountant can help you with data management, financial analysis, the generation of financial reports and can also ensure that your company meets regulatory compliance with its accounting practices.

Question 4

Do I Have the Time to Do My Own Accounting?

Maybe you’re on the road constantly. Maybe you’re being pulled in a lot of directions at once; your clients need your input, or maybe your employees need detailed direction with your startup. The phone doesn’t stop ringing, and the emails keep piling up in your inbox. Whatever the reason, maybe you simply don’t have the time to do the company’s accounting. If that’s the case, then maybe it will be a relief to hand this responsibility off to someone, someone whose specialty is accounting.

Question 5

Do I Know How to File an Income Tax Return for My Small Business?

Many new small business owners don’t understand how to file taxes, which becomes a problem at tax time. Owners spend so much time concentrating on getting their businesses off the ground, making new contacts and obtaining clients, that taxes was something they were going to worry about “next year”. But tax time comes fast.Are you aware that many small business owners simply file their personal and business taxes together, in one return? These types of businesses are referred to as “pass-through” entities. This means the profit is only taxed once. In late 2017, the Trump administration introduced the Tax Cuts and Jobs Act (TCJA). Although there are certain restrictions, the TCJA allows for a new tax break for small business pass-through entities, equivalent of up to 20% of its income.The TCJA also made changes to what’s deductible, what’s not, and the amounts. So maybe it’s time to consider consulting an accountant, at least for your company’s first tax filing. An accountant will best be able to tell you what’s allowable, and what’s not.

Question 6

Can I Afford an Accountant?

Accountants don’t have a standard or regulated rate. The amount you pay will depend on the individual you want to hire, and the education and work experience of that person. Our Co Acc community member will be happy to assist you.

Question 7

Maybe I Hire an Accountant Part-Time?

Consider that maybe you don’t need an accountant full time, maybe it’s just part-time, perhaps a couple of days a week. You can map out this person’s time, in advance. Maybe half the accountant’s time is spent working on the ‘paperwork’ the company is continuously generating in relation to its income and expenses, and maybe the other half of his time is spent in consultation with you on accounting strategy. This will include his advice, based on the financials, on how to best spend your company’s money on resources required to keep the business profitable. Hiring an accountant part-time can save you some money, and it might be all you really need.

Question 8

Maybe I Need a Bookkeeper Instead?

Sometimes a small business might not have tremendous amount of transactions, but little or none of it is being recorded properly. That’s where a bookkeeper comes in. A bookkeeper is not an accountant. There is no formal training required by authority to call himself a bookkeeper. But a bookkeeper’s job, mainly that of recording transactions properly as it relates to a company’s income and expenses, is important. That’s because the interpretation of those numbers will influence management’s financial decisions. A bookkeeper with some experience can recommend an accounting software solution to track the company’s income and expense payments, and manage that system. He can help you develop bookkeeping policies and procedures, and make your company more efficient by training your team on how to enter their own expenses. He can handle the trips to the bank, and troubleshoot discrepancies in the data captured by the software. A bookkeeper will cost you less than an accountant. Hiring a bookkeeper may be a cost-effective solution for your small business. But again, a bookkeeper is not an accountant. Perhaps you hire an accountant occasionally, to meet with your bookkeeper and consult on whether the system you have in place is effective.

Question 9

Does My Small Business Have Problems with the Government?

If you do, and the LHDN wants to take a look at your books, then maybe you need a CPA. A CPA, or Certified Public Accountant, is exactly that - certified. Hiring a CPA means you have someone working for you who is educated, experienced and considered to be an expert in the field of accounting. A Certified Public Accountant can prepare an audited financial statement or act as your representative in front of LHDN. An accountant cannot do these things. Keep in mind a CPA is also very well paid, and although rates vary, they are typically much higher than that of an accountant. Chances are you don’t need one full time. So, weigh your problems with what may happen if you don’t get professional help. The expenditure may be worth it.

Question 10

What Happens to My Business Long Term If I Don’t Hire an Accountant Now?

Consider your business now. How fast is it growing? Perhaps you’re working late two nights a week, just to keep up on the accounting. Perhaps you feel that’s worth it, just so you have a good grasp on the financials at any given time. But now ask yourself, is this workload sustainable? Or would you rather have someone who can just give you the top line summaries when you need it? In this way, you can step back from the details and just focus on the big picture. Which is where, as a business owner, you need to be. This will allow you to make better financial decisions for the long-term health of your company.

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