Small business owners don’t have time to waste on tasks that other people could do just as well. As the leader, your days could be better spent finding new clients and building up your business than mucking around in the administrative weeds.
While you may not have enough cash on hand to hire someone new for every little thing, you must be able to recognize when you need help. Working too many hours, feeling frantic, or having to choose between key meetings are sure signs that you need another hand on deck.
What is one task that can quickly get out of control? Managing your accounting and bookkeeping. The bigger your company grows, the more difficult things like payroll and compliance become. If you aren’t sure whether your situation merits a call to an accountant, look for these seven signs:
When You Don’t Know How to Classify an Employee
Misclassifying, a full-time employee, as a contractor, carries serious consequences. Even if you mean no harm, you and your business could face stiff penalties if you make the wrong call. Online payroll company OnPay outlines how to determine the correct employment classification, the potential consequences of your decision-making, and the paperwork you’ll need to complete. Regulations on contractor status vary by state, so bring in a professional if you aren’t sure. An accountant can help you figure out which employees qualify as contractors, which ones don’t, and what to do when you need to convert an employee’s status from one to the other.
When You Need to Formalize Your Company’s Structure
Maybe you began your company as a freelancer, hired a few contractors to help, and now find yourself working out of a downtown office with a growing team. Plenty of others have followed the same path. Legally speaking, you can’t continue to operate as the same entity after you surpass a certain level of growth — or, if you can, you’ll miss out on serious tax savings. An outsourced accounting company, The Hell Yeah Group, outlines a few of the pros and cons of formalization. Once you grow large enough, work with an accountant to formalize your company’s structure, and start saving money.
When You Want to Create a Business Plan
For business owners in the early stages, investors typically want to see more than good ideas and enthusiasm. Smart investors demand smart business plans. You may know how you expect to make money, but an accountant can help you fill in the gaps to create a more detailed picture. With a solid business plan, you can better anticipate what your cash flow will be, how much runway you have, and what kind of day-to-day growth you’ll need to see to reach your long-term goals.
When Your Company Faces Challenging Regulatory Requirements
Not all businesses operate on the same playing field. Businesses in specific industries face different regulations than others. Companies that ignore the rules, deliberately or not, can face massive penalties and punishments from government agencies. To make sure you don’t accidentally cross the line, get with an accountant who has worked in your industry before. The ideal partner will provide both legal and financial advice to keep you and your business on the right side of the books.
When a Bookkeeper Is No Longer Enough
Bookkeepers manage the daily grind of company finances. Accountants, on the other hand, look at the bigger picture, often working alongside or in place of legal teams to handle certain tasks. Many small businesses employ full-time bookkeepers, but if you find yourself always calling an outside accountant for help, consider bringing in a full-timer to supplement your team. QuickBooks provides an excellent guide on the differences between the two professions and how to know what you need.
When the IRS Comes Calling
Whether you worked with an accountant in the past or did everything yourself, don’t leave your company’s future to chance when the IRS comes calling. From full-scale audits to everyday conversations, contact your accountant the moment the IRS starts poking around. You might be able to handle it yourself, but if not, the consequences could affect your business for months or years. As soon as you get that letter from the taxman, pick up the phone and set up an appointment with your accountant to ensure you have nothing to worry about.
When You Want to Scale Rapidly
Whether you’re a startup or an established small business, growing by leaps and bounds requires additional investment. Accountants can help you understand how much money you’ll need, where to allocate it, and how quickly you can burn it. They can help you understand the tax implications of taking a loan or giving up equity. Although your accountant probably can’t help you pitch an investor, he or she can help you do your homework. And if there’s one thing investors want to see, it’s that the person they invest in has a plan to spend the money wisely.
Bonus: Before You Want Your Taxes Completed on Time
Business owners with plenty on their plates don’t always prioritize things like tax deadlines. Accountants do, though, which means they can help you stay on track and avoid late payment fees. And if you do incur a fee, an accountant can help you work with the IRS to reduce or eliminate it.
Talk to your accountant as soon as you have everything you need to file so you don’t get caught up in the crowd of other clients, hoping to beat the deadline. People who submit all their documentation the day before their taxes are due rarely make it in on time.
Even if you don’t need a full-time accountant on staff, keep the number of a trusted partner on speed dial. Running a business presents different challenges every day, and an accountant can help you navigate the treacherous waters of regulations and tax codes more easily. Once you find the right person for the job, that relationship will become one of your company’s most valuable assets.
Businessman making call – DepositPhotos
The post 7 Times When You Need to Call Your Accountant appeared first on Tweak Your Biz.
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