As a business owner, you handle a lot of responsibilities on your own to cut costs. But there comes a point when DIY accounting starts hindering your business’s growth and productivity. How do you know when it’s time to hire an accountant? In this blog post, we will share  12 clear signs indicating you need professional accounting help.

Signs You Need to Hire an Accountant

1. You’re Making Tax Mistakes

Tax laws seem straightforward but are riddled with intricacies. For instance, you may miss out on deductions or make errors calculating depreciation. Such tax mistakes can lead to penalties and extra payments to the IRS.

An accountant intimately understands tax codes and ensures compliance. They file accurate, timely returns minimizing your tax outlay. Their expertise saves you money over incorrectly filing taxes yourself.

2. Bookkeeping Overwhelms You

Bookkeeping entails organizing financial documents, tracking transactions, and producing reports. For small businesses, DIY bookkeeping seems convenient. But as you scale, it becomes increasingly tedious and time-consuming.

You may fall behind on tasks like reconciling accounts, tracking deductible expenses, and invoicing clients. Outsourcing bookkeeping lets you regain focus on business-critical functions. Accountants also leverage accounting software and processes for streamlined recordkeeping.

3. You Need External Financial Reports

Most business decisions require reviewing financial statements like profit/loss, cash flows, and balance sheets. While you can produce internal reports, seeking capital, investors or loans necessitates audited statements.

Generating GAAP-compliant, audited reports is challenging without accounting know-how. External stakeholders also find financials more credible when prepared professionally.

4. You Want to Gauge Business Performance

DIY accounting with basic software only provides superficial financial data. To gain deeper insights, you need custom reports like variance analysis, sales metrics and inventory turnover rates.

Accountants construct tailored reports to measure performance against organizational goals. Their analytics help identify issues and growth opportunities. Unawareness of key financial metrics can cause you to overestimate or underestimate progress.

5. Your Finances are Disorderly

As transactions multiply, financial records get disorganized without proper processes. Invoices, bank statements and contracts pile up unattended. Not systematically tracking income, expenses, account balances, and payroll makes financial management tedious.

Accountants implement orderly systems for categorizing transactions, document storage, processing receipts and billing. Streamlining finances saves time wasted searching for documents and clarifying unclear transactions.

6. You Find Accounting Mentally Exhausting

Accounting requires total concentration to avoid costly errors while performing intricate tasks like expense auditing, reporting, and reconciling accounts. As responsibilities and data grow, accounting becomes increasingly mentally grueling.

Expert accountants are used to such complex work and require minimal supervision. Letting a professional handle tax compliance, audits and financial analysis frees your mind for innovative thinking.

7. New Regulations are Confusing

Federal and state governments regularly introduce new regulations pertaining to payroll, taxes, and financial reporting. Unawareness of changing compliance mandates can attract penalties. But keeping up with ever-evolving rules is challenging.

CPAs undergo continuing education to stay updated on the latest accounting regulations. Rather than stressing to self-learn new mandates, leverage their knowledge to avoid noncompliance costs and legal troubles.

8. You Need Advisory Services

Beyond core accounting functions, experienced accountants offer advisory services like identifying capital needs, reducing costs, minimizing risks, planning investments and preparing exit strategies.

Lacking accounting qualifications, your strategic decisions as an owner may prove inefficient or harm profitability. CPAs apply their financial expertise to help boost your bottom line.

9. Your Growth is Straining Resources

Expanding locations, adding products/services and entering new markets all require additional accounting capacity. As your company grows, accounts and finance management needs also multiply.

Skilled accountants smoothly handle increased workloads using best practices. They scale accounting alongside business growth to help manage costs and productivity. Handing accounting to a professional firm provides flexibility to scale.

10. You Want Accounting-Based Insights

Beyond report generation, accountants analyze what the numbers mean about your business’s financial health. Their insights help make smarter decisions to correct problems, capitalize on opportunities, and plan strategy.

Lacking accounting training, you may miss identifying issues hurting profitability or chances to improve processes. Let accountants compile actionable business intelligence through financial data.

11. Accounting Drains Your Bandwidth

Accounting done manually or partially automated still occupies your time for oversight. As an owner, you likely handle other functions like sales, marketing, HR and operations as well. Wearing so many hats leaves you overworked and distracted.

Delegating accounting responsibilities fully to a professional gives you back time to focus on core business activities more suited to your skills. Their specialized expertise also leads to better financial outcomes.

12. You’re Making Business Decisions Blindly

Without accurate, up-to-date financial records, you lack visibility into your company’s actual standing. Financial uncertainty causes you to make business decisions based on intuition rather than facts.

Accountants provide real-time visibility into performance through financial reports, projections, and metrics analysis. Plus, their guidance helps make financially prudent decisions benefiting your bottom line.

Key Takeaways: When it’s Time for Professional Help

Doing your own accounts can work temporarily for a new business. But accounting and tax needs inevitably outgrow DIY solutions. Handing finances to qualified accountants provides:

– Expertise in regulations, reporting standards, and analysis
– Efficiency through accounting software, best practices and automation
– Advisory services driving growth, savings and risk reduction
– Reliable financial data aiding smarter strategizing
– Scalability as transactions and workloads grow
– Peace of mind from accurate compliance and filings

The more your business scales, the greater the need for a skilled accountant. Gauge when the time is right to transition using the 12 signs outlined above. The investment pays dividends through optimized finances and invaluable expertise. With professional accounting assistance, you can focus on progressing your business goals.

Conclusion

Handling all accounting yourself is impossible as your business expands. While you know your company best, accountants have the qualifications to manage finances reliably and profitably. If aspects like tax compliance, bookkeeping, financial statements or advisory seem increasingly challenging, it’s time to hire help. Outsourcing to an accountant provides specialized skills and bandwidth so you can concentrate on growing your company. With professional accounting expertise on your side, your business is well-equipped to achieve enduring success.