As a small business owner, it’s not easy to conclude when to hire an accountant since our resources are so limited. Here’s how to judge.
When you are too busy to handle
To be honest, it never happens since doing accounting is a part of your business and it is crucial to maintain your business healthy. For example, if you don’t check your bank account balance by yourself, your employees can cheat you anytime. ANYTIME! We would like to believe people you hire but at the same time, we should check if it works. Trust doesn’t mean you don’t check.
However, you have many things to do every day from morning to night (sometimes even to mid night) such as sales, marketing, operation, customer support, negotiation with suppliers, making contract etc etc. We understand you are overwhelmed and it is helpful to engage a professional accounting service to maintain your accounts properly.
Please be aware that you must check critical figures and work process anyway.
- Bank balance (the most important)
- Total expenses
- The list of transactions (no matter made by whom)
Then, you can partially rely on your accountants in bookkeeping and accounting.
When you are not familiar with accounting and bookkeeping
This is the most common case as we talked with small business owners. Many don’t know about accounting at all although they can know how to count money. As a result, most of small business owners check if revenue goes up but not how profitable their businesses are. They review at the end of the year which is too late to increase profitability quickly.
What can you do with a professional accounting services? You can outsource the “work” but you should take care of “analysis” by yourself. For instance, an accountant hired by you will record books following accounting standard in Singapore and gives you some data. List of transactions, general ledger, profit and loss statement (P/L) and balance sheet (B/S).
These are NOTHING without analysis. You are the most familiar with your business, needless to say. Hence, you should be able to analyse the data with your business knowledge. Don’t be scared. You can understand the figures with common business sense and your expertise in your business. As a result, you don’t need to study accounting since you don’t need to make financial statements. At the same time, you can get insights from accounting = financial statements.
When you need help from an accounting service
Are you going to raise funding? Do you talk with banks for loans? Then, you must compile nice financial statements with domain knowledge. Those professionals charge you not cheap price but for their expertise cumulated over years of experience.
In this case, it’s not possible to catch up such people with profound domain knowledge. Just hire proper services.
It’s good investment to hire an accounting service for your business. When you feel necessary, you should carefully design how you work with such accounting service and accountants. You cannot get rid of all the work related to accounting and bookkeeping but you can reduce the amount of time and effort spent on accounting operation.
You might find the article about why you should hire an accounting firm useful.