Taxes and Accounting

When should you hire an accountant?

Taking the time to thoroughly research a potential financial advisor can provide your business with long-term benefits.

Published: March 09, 2017
Tags: accounting

By Xero

Deciding to hire an accountant is a huge step forward for any small business, but choosing the right advisor requires careful consideration. The right one will go beyond just balancing your books — depending on what you're looking for — and could become a trusted advisor you can depend on, offering guidance as your business grows.

With some careful thought and research, you can find an advisor that is the right fit for your business' needs.

Decide what your business needs from an accountant

Regardless of what has spurred you to hire an accounting professional, it's important to think about what your business needs from an accountant in order to find the right one.

It's beneficial for some to hire an accounting professional whose services you engage less frequently — maybe setting you up on accounting and payroll systems so you can do the bulk of the work yourself. Others may need an accountant who is able to spend a lot of time advising you on matters like tax and, on a broader level, your business in general.

In addition, keeping your business's records up-to-date is a critical part of running any business. Without records that reflect the most current financial state of your business, it may become difficult to keep a good handle on the business's cash flow situation.

Situations like this might also call for a good accountant, especially for owners whose business is highly interwoven with their personal finances. You might be surprised just how much an accountant can do for your business.

Do your research

The widespread use of cloud accounting software today means that it's easy for a business owner to collaborate with their accountant no matter where either of them is based. With so many options, it's important to jump online and research potential picks. The Xero Advisor Directory is a great place to start, particularly as it enables industry and location-specific searching which can be helpful if you want to engage someone local or specialized in your line of work.

Once you've completed your initial round of research, you can visit their websites for more information about pricing, service packages, and the kind of accounting software they specialize in. A good accountant or accounting firm should have an easy-to-use, up-to-date website detailing all of this information.

Having a blog where they write or post relevant content such as changes to legislation and tax reporting may also be a good indicator of whether the potential accountant or accounting firm considered is a thought leader in their industry. Visiting their LinkedIn profile can also help you find recommendations from clients to ensure their credibility.

Interview several candidates

With a shortlist in hand, now's the time to start interviewing potential candidates. This is an opportunity to find out how well you'll work with the person and to gain a better understanding of their price structure. Not every accountant charges by the hour; some charge a monthly retainer or a fixed fee. It's up to you to decide what works best for your business and what's a fair price. The worst that can come out of an unfruitful interview is potentially gaining some valuable free business advice.

Choosing the best financial accountant is not a decision that's to be taken lightly. Your accountant has the potential to one day become your trusted advisor and help you grow your business. No matter what stage your business is at, the relationship between you and your accountant is an important one.

Learn more about the basics of accounting and bookkeeping.

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