Did you know that about 48% of small businesses fail within the first five years? Financial issues are among the greatest issues business owners face. You have taxation, expenses, payroll, legal compliance and financial planning to consider. Just one error and you might be paying hefty penalties or missing out on tax deductions.
This is where an accountant can save you time, anxiety & money. So, whether you are a sole proprietor or you operate an expanding company, a small business accountant will enable you to keep tabs on your money and stay away from expensive mistakes.
But do you really require an accountant? Or can you get it done yourself with accounting software? This article is going to walk you through the key questions to think about prior to employing an accountant for your small business.
How to Decide if You Need an Accountant for Your Small Business?
Here are some questions to ask to help you decide the question “Do I Need an Accountant for my Small Business?”:
1. Can I Do My Business's Accounting By Myself?
Ask yourself - do you understand the difference between single entry & double entry bookkeeping? Are you familiar with producing financial reports and preparing taxes? If you said no, you are not alone. Many business owners have no formal accounting training and that is normal.
Small business accounting is more than recording income and expenses. It involves:
- Cash flow & profit tracking.
- Payroll & employee benefits.
- Handling business taxes/deductions.
- Preparing financial statements.
- Conformity with local and federal income tax laws and regulations.
In case this seems overwhelming, you may have to hire an accountant to handle it for you.
2. Do I Have Time To Do My Own Accounting?
Operating a small business means managing several responsibilities including CEO, marketer, salesman and maybe even delivery person. And so, do you also have the time to become your own accountant?
A lot of business owners spend many hours attempting to balance their books rather than concentrating on their real passion - growing their business. In case you spend way too much time on accounting tasks, you might want to look for a personal accountant.
An accountant can:
- Free up your time to run your company
- Prevent mistakes that set you back on money and
- Plan for long-term financial growth.
In case you spend far more time handling finances compared to running your business, you might need a small business accountant.
3. Am I Tech Savvy Enough to Use Accounting Software?
You may think "I don't need an accountant, I could use QuickBooks or FreshBooks". It is true that accounting software has made tracking finances easier. But software still needs input and accuracy.
Ask yourself:
- Do I understand how to group business expenses correctly?
- The best way to generate the correct financial reports?
- Can I track all deductions and credits available to my business?
Even with software, there are many mistakes you can end up making. In case you're not positive about accounting tasks, you may still require an accountant to double check your records.
4. Do I Know How to File Taxes for My Business?
Taxes tend to be a significant issue for small businesses. The IRS tax code is complex and even a tiny error may lead to penalties or an audit.
A small business accountant may:
- Pay the proper amount of taxes - no more no less.
- Identify mistakes you may not be aware of.
- Handle monthly tax returns so that you do not overlook due dates.
- Help you if the IRS checks your business.
Many business owners believe they are reducing expenses by doing their very own taxes, but errors in tax filing can cost more than an accountant's hourly rate. If tax season 2025 has you sweating too much, consider employing an accountant for your small business.
5. Could I Afford an Accountant?
You are probably thinking "I cannot pay an accountant!" However, ask yourself this question - can you afford to not hire one?
Employing an accountant is an investment and not a cost. A good accountant can:
- Find tax deductions to save you money
- Avoid penalties & late fees
- Give financial advice that grows your business
The cost of hiring an accountant depends upon the services you need. Some business owners employ an accountant part time and others only consult an accountant during tax season. You don't always have to have a full time accountant - there are other choices as well.
In case you are on a tight budget :
- Hire a part time accountant for filing taxes and financial planning.
- Conduct daily expense tracking utilizing bookkeeping services.
- A few times each year, you can consult an accountant for financial strategy.
So, even in case you can not afford an accountant, at least speak with an expert to see what your options are.
6. Should I Hire a Bookkeeper Rather Than an Accountant?
Unsure whether you need an accountant for small business or simply a bookkeeper? Here is the basic difference between the two:
- Bookkeepers maintain daily financial records - like income, expenses and receipts.
- Accountants analyze economic data, prepare taxes, and also give business advice.
In case your business has only basic finances, a bookkeeper may be enough. But in case you require tax planning, fiscal forecasting or assistance with legal obligations, you should employ an accountant instead.
7. What If I Do not Hire an Accountant?
In the event you do everything yourself, you risk making costly blunders. Common issues include :.
- Overpaying for underpaying taxes.
- Missing IRS deadlines and paying penalties.
- Mismanaging cash flow, causing financial trouble.
- Taking bad financial decisions because of poor advice.
Employing an accountant is not just about staying away from issues; it is also about building your business quicker and smarter.
Read Also | Where Can I Find Accountants that Specialize in Small Business?
Final Thoughts
Whether you should hire an accountant for your small business is a personal choice. When you have the time, confidence and knowledge to handle your own personal finances, accounting software might be sufficient. But in case you have difficulties with bookkeeping, financial planning or taxes, you can save stress, money, and time by employing a small business accountant.
We at The Fino Partners have 15+ years of experience, 250 accountants and over 350 clients in the US. Stop letting financial stress keep you down - hire an accountant today and get to expanding your business with confidence!
