Do I need an accountant for my small business? This is a great question and it can depend on your comfort level in completing your own bookkeeping and tax filings and also whether or not your business needs financials.

Small businesses often choose to hire accounting firms for a variety of reasons. Accounting firms can help their client navigate the taxes and financial needs of a business and the business owner. You may hire an accountant but only use a small selection of the services they offer. For example, perhaps you may not need bookkeeping services as you are comfortable completing this on your own. Instead, you may just hire an accountant to prepare your year-end financial statements and tax returns.

So, do I need an Accountant?

Here are some of the most common reasons why small business owners consider hiring accounting firms.

Financial Expertise

Accounting firms have experienced professionals who are knowledgeable about bookkeeping, accounting and financial management. Small businesses can benefit from this expertise, especially those without an in-house accounting department or staff. This can be divided into different parts. Bookkeeping is the practice of recording and tracking financial transactions in your business. Accounting is the practice of summarizing, analyzing and reporting these transactions.

Most businesses getting started, only need a bookkeeper to start and their year-end reporting requirements can then be allocated to an accountant at year-end. As the business grows, more services may be then required as the business may need additional insight throughout the year. These tasks are generally overseen internally by a Controller or CFO.

Accounting firms can provide fractional CFO/Controller services throughout the year which would include advice on cash flow management, budgeting, and forecasting. This will help small businesses make strategic decisions about investments, expansion, and other business operations.

Time Savings

If you are a small business and do not have individuals experienced in financial management. Outsourcing your bookkeeping/accounting can help save you time. Maintaining accurate financial records can be time-consuming, especially for small business owners who are already stretched thin. Accounting firms can handle routine financial tasks like tracking income and expenses, managing accounts payable and receivable, and reconciling bank statements. This can free up valuable time for small business owners and their team to focus on their core competencies, such as sales, marketing, and customer service. They can also assist with the implementation of accounting processes to reduce everyone’s administrative time.

Cost Savings

Outsourcing bookkeeping tasks to a firm can be cost-effective for small businesses, especially compared to hiring an in-house accountant or bookkeeper. The average bookkeeper salary on Glass Door in 2022 was $47,816. CPA Canada listed the average salary of a CPA in Canada as $76,146. Accounting firms can charge a flat fee or hourly rate, depending on the services provided. This can help small businesses save money on salaries, benefits, and overhead costs associated with having a full-time employee.

Compliance with Tax Laws

Accounting firms can help small businesses stay compliant with tax laws and regulations. This can include preparing and filing tax returns, ensuring that all tax payments are made on time, and keeping up to date with changes in tax laws. There are lots of taxes in Canada (sales tax, payroll taxes, corporate taxes, personal taxes etc) and it can be hard as a small business owner to stay on top of all the compliance without help and guidance.

Improved Financial Management

Working with an accounting firm can help small businesses improve their financial management practices. Accounting firms can provide financial reporting, analysis, and consulting services, which enables small business owners to understand their financial statements and make informed decisions about their business.

Reduced Risk

Outsourcing bookkeeping tasks to a firm can help small businesses mitigate risks associated with certain tasks. Accounting firms typically have the skills and experience to manage financial risks effectively.

Overall, small businesses love to hire accounting firms because they provide financial expertise, time and cost savings, compliance with tax laws, improved financial management and reduced risk. Hiring a bookkeeping firm can enable small business owners to focus on running their business while leaving the financial matters to experienced professionals. When looking at accounting firms, be sure to first consider what you need in a firm as not all firms will be a good fit for you. For example, Virtual Heights Accounting offers a variety of services great for small businesses. We have a diverse clientele with concentrations in the services and technology industries. Service industries include for example clinic owners, marketing, IT Service companies. While technology companies include app and game developers. Within these industries, we have well-tuned processes in place and shared industry knowledge. Here is a look at what services we provide for Canadian businesses.

Virtual Heights Accounting is a CPA firm that operates in the virtual world. We provide virtual bookkeeping, accounting, and tax services for your growing Company. Contact us at www.vhaccounting.ca/contactus or follow our blog on your chosen social media source.