We are often asked, "When should I hire an accountant?" Well, the quick answer is:
As soon as possible.
But you can have a sense of what you're looking for in an accounting professional based on what stage of business you're in**:
Three years or less in business, and/or earning less than $50k/year
At this stage, your focus is going to be tracking income and expenses to make sure you have an accurate accounting for everything coming in and out of your business. Your priority in getting help should be consulting meetings with an accountant, alongside DIY programs and services. This might also be when you want to consider hiring a bookkeeper.
Five years or less in business, and/or earning between $50k and $100k/year
This is typically the point at which we see a profit for the business, and the need for tax strategy is more apparent. A bookkeeper is going to be a great help to you, and the need to hire a tax accountant to help determine the best direction for your company tax-wise is a priority. You'll be able to get assistance on the best business entity type for your tax goals, advise you on deductible expenses, and help you estimate quarterly payments.
Three years or more in business, and/or earning between $100k and $250k/year
You're making a consistent profit, and you're ready to build on the foundation to make strategic decisions about where the business is headed. Since you need help beyond categorization and annual tax returns, you'll want to start looking for an advisory service to provide ongoing support for your business. In addition to bookkeeping and tax responsibilities, you want to learn more about financial statements, as well as best practices for the financial related operations tasks (i.e. workflows for invoicing, getting paid, and paying your team). Part of this growth is looking at the future, and your expert should be able to help you develop and track budgets and forecasts so that you can pivot and analyze throughout the year.
Five years or more in business, and/or earning more than $250k/year
At this point, you've grown to a point that you want your time back. You're ready to step firmly into your role as CEO, and are looking for a partner to take care of your financial tasks and responsibilities. All of the workflows and processes that you put in place will allow your accountant to take this role off of your team with ease so that the employees and contractors that work for you can focus on their duties. Since your accountant will now be involved at all points of the process, there are fewer gaps and more opportunities for advisement on the business' finances holistically.
Ready to hire help? Check out our offerings at littlefishaccounting.com/services and apply if we would be a good fit.
**Disclaimer: Everything ain't for everybody. You may find that these needs happen before or after the parameters set above and that's ok! At the end of the day, this is a baseline to help you get a sense of when different areas of need will arise for your business. Also, we are accountants, but not your accountant (yet). Make sure to get specific advice for your business before taking any action.