When Micro-Businesses or Freelancers Should Hire an Accountant

When to hire an accountant

Micro-business owners and freelancers often do their own bookkeeping, but knowing when to hire an accountant can prevent financial problems and heartache in the future.

From managing their business finances to marketing, freelancers and small business owners like to roll up their sleeves and pitch in. Usually, they do so out of necessity, particularly when starting a business. They may not have the financial resources to hire an accountant or financial advisor. When starting out, or if their business is small or a one-person operation, the do-it-yourself route makes sense. The side-benefit of DIY is the experience and education gained. There are times, however, when hiring an accountant or financial advisor makes sense, too.

Most of the Time. Do-It-Yourself Bookkeeping Works for Micro-Businesses and Freelancers

With small business accounting software such as Flare, you’ll be able to handle most of the bookkeeping and transaction recording tasks necessary for your business. You’ll find it’s quite easy to create invoices and record bills, record invoice payments and bill payments, connect to online banking and download transactions, print financial reports and create budgets. If you can do all of this so easily, then why you hire an accountant?

Following are situations when you will benefit from hiring an accountant.

When Starting Your Business

When you are first starting your micro-business or freelance business, it’s wise to contact an accountant or financial advisor to help you create a realistic startup plan and business plan, and for some education about choosing an appropriate business structure. An accountant can also discuss your responsibility to tax authorities. A little knowledge at the beginning will go a long way. A few meetings with an accountant at the start is money well spent.

To Set Up Chart of Accounts or Migrate from Another System

Just after you’ve purchased a small business accounting software subscription and before you begin using the software daily, a little help from an accountant or bookkeeper will ensure that you start off correctly. You can easily invite your accountant to use your Flare Cloud Accounting account. After you sign up for a free trial, you may want help choosing chart of accounts categories. Each transaction you record needs to be recorded to a chart of accounts category. While you can use Flare’s default chart of accounts categories, an accountant may suggest categories or set them up for you. This is more important for businesses that are migrating from another accounting system. Those businesses will want to make sure that chart of accounts categories in their old accounting system are set up in Flare.

If you are migrating from another accounting system, do-it-yourself migration is certainly possible (see the Migration checklist in the Flare Help guide), although an accountant may save you some time and ensure a smooth transition to Flare.

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At Tax Time or If You Have Tax Questions

Tax time may be the most important time of year to hire an accountant. Although you may be doing the daily bookkeeping, you’ll want to ensure that the information provided to tax authorities is complete and correct. You can invite your accountant or bookkeeper to use Flare and they can export the financial statements required to complete your tax return. Throughout the year, you may want to ask your accountant questions about taxes and how they are recorded in different situations, or, to help you plan for taxes, including being certain you are properly recording all allowable tax deductions.

When You Want to Create Profit Goals and Budgets

If you are trying to grow your business, and accountant may provide advisory services, including giving you advice about using a budget. You’ll find Flare’s budgeting feature easy to use, and can invite your accountant to use Flare and help you set up realistic goals.

When You Need Help with More Complex Accounting Tasks

An accountant can quickly take care of more complex accounting tasks or fix a calculation error or recording error quite quickly – saving you unnecessary time and frustration and ensuring your records are accurate.

When You Need Financial Advice

Accountants see things differently than you do. While you are the expert at running your business, and may even feel empowered by your accounting and finance software, an accountant or financial advisor is an expert at analyzing your business finances. By inviting them to Flare and letting them peek under the hood, they may see ways you can improve operations for optimal financial performance.

What Does It Cost to Hire an Accountant?

Accounting service prices vary greatly. Some accountants provide free initial consultations, while others charge a fee. According to the AdvisoryHQ article “Average Accounting Costs and Accountant Fees” some accountants charge an hourly fee from $30-50/hour for bookkeeping services and $50-150/hour for other accounting services. Many accountants charge a fixed-fee for monthly bookkeeping services. Depending upon the monthly services you need, fixed fees can be between $25-$275/month.

How Can I Find a Good Accountant?

As we discuss in “What to Consider Before Hiring an Accountant or Bookkeeper”, there are several ways to find an accountant for your small business. Consider getting a referral from other small business owners or visit one of the following websites for lists of professional accountants.

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