How to hire an accountant for your small business
Updated: Jul 16
Kiin restaurant in Pittsburgh used their crowdfunding campaign to rebrand their beloved restaurant into a place that celebrates Lao and Thai food!
As your small business grows and you start getting more and more income streams - events, farmer’s markets, online sales, brick-and-mortar, and so on - managing your finances can become a dizzying pit of confusion and despair.
Sure, you can try to keep your books and handle your taxes on your own in an attempt to save money and be more self-sufficient, but if it’s getting in the way of your day-to-day business dealings, it might be time to hire an accountant.
But, what do you need to look for in an accountant? What kinds of accountants are out there? When is the right time to start looking for one? And what do you do once you’ve found the right accountant to hire?
Accountants are integral to your small business because they can not only keep your money in order and, y’know, keep you from getting audited, but they can also be a valuable resource for making financial decisions and deciding when it’s time to grow.
At Honeycomb, we love accountants because they are the behind-the-scenes workers helping to support small businesses - kind of like us! In fact, some accountants have even helped their clients find us, such as Jason Ridgel, owner of Guidance Whiskey in Nashville. His accountant actually introduced him to Honeycomb, and he eventually ran a $120,000 campaign to expand his whiskey company!
Here’s a quick guide to what you, as a small business owner, need to know about finding, hiring, and working with an accountant. In this article, we'll cover the following:
What kinds of accountants are out there?
First of all, there are different classifications of individuals who can help you with various financial needs for your small business, all with different skill sets and levels of certification. It’s a good idea to do a quick scan of what needs you actually have for your business at the moment, so you know what kinds of financial professionals you need to look into.
Bookkeepers take on more of an administrative role in your business, gathering the data that your business creates, recording, and organizing it. They manage payroll, invoices, credits and debits, and other accounts and ledgers.
They are not considered accountants, as they don’t do tax work or anything really associated with government expenses, and they often are overseen by accountants. You can also hire an in-house bookkeeper as part of your staff, and then they can work closely with your accountant.
Bookkeepers don’t need to be certified, but there are licenses they can get to become accredited. The average wage for an independent bookkeeper is about $20 an hour, and the average wage for an in-house bookkeeper is $44,000 a year, so consider how often you might need a bookkeeper’s services when deciding what kind of a relationship you might need with them.
Accountants take the data that bookkeepers gather, and make projections on your financial prospects based on their analysis.
The duties of an accountant include managing your data, financial consultation, creating financial reports, and making sure you’re complying with government regulations. As you can see, they’re not just for tax season!
Accountants can spot trends and can give you some advice based on your financials. If you’re looking to make a big expenditure, for example, they can do the analysis and see if it’s a good idea, and they can help you find the options to fund it.
Certified Public Accountants
Certified Public Accountants (CPAs) are certified by the state, after going through a rigorous, multi-day exam to get their certification. They offer more financial and tax expertise than a regular accountant, and they’re also more qualified to represent your company in a tax audit.
Basically, all CPAs are accountants, but not all accountants are CPAs. A Certified Public Accountant is a great idea especially when you’ve got complicated financials and you need to be sure of regulatory compliance.
When to Hire an accountant for your small business
Many small business owners treat their financials like they would personally and only hire accountants for tax season when they start drowning in a pile of forms and numbers. However, a good accountant is a year-round asset because they can help you manage your numbers throughout the year and help you make sound financial decisions
One easy indicator that it might be time to hire an accountant or bookkeeper is when you start hiring lots of employees and payroll starts taking on a mind of its own. This will ensure that your employees get paid on time and are taken care of.
Another signal that you should hire an accountant is when you’re spending too much time on accounting stuff rather than your business. Delegating is hard for small business owners, we get it, but this is one thing you can easily put into responsible hands, freeing up your time for more important tasks.
In fact, no offense to your own financial skills, but hiring an accountant to do your financials might be the opposite of “if you want to do something right, do it yourself.” Doing something as meticulous and specialized as accounting yourself, as someone with no formal training, could be a recipe for disaster - better to put it in the hands of a professional.
And yes, tax season at the very least is a time when you should consider hiring an accountant. Not only can they help get your taxes in order, but they know where to look for any potential savings.
As mentioned before, accountants can also find potential areas of growth and identify when the right time to make any big financial moves. If you’re looking into a growth project that needs a lot of capital, like opening a new location or renovating your existing one, they can help you get information together for applying for loans.
Learn more about how Honeycomb Credit crowdfunded loans help small businesses unlock capital, strengthen their customer relationships, and generate marketing buzz here.
How to find an accountant for your small business
Ask for referrals from colleagues
Put that network of small business-owning friends to use and ask around about good accountants!
This is especially important as you look for industry-specific accountants. A restaurant owner’s financial needs are going to certainly be different than that of a farmer, or clothing retailer, or whatever it is you do. Looking for accountants with the kind of expertise you need is imperative because they not only know the money stuff, but they have an idea of what it looks like for you as a business owner in your field.
It can be as simple as researching, “Small business accountants in Pittsburgh,” or whatever your city is. Just make sure you check their credentials - are they a CPA? When did they get certified?
It’s always a good idea to meet with your accountant face-to-face (whether in-person or virtually), so you can ask them the kinds of questions you need to know and get a feel for them. After all, they’re handling your money, and you could be putting your trust in them by asking their advice about your business’s financial future!
Questions to ask a prospective accountant
Once you’ve found an accountant or two that you think would be a good fit for your business, you should definitely schedule an introductory meeting with them. At this meeting, you can get a feel for them, and ask them questions about their services. Here are some examples of questions you absolutely need to ask:
What are your billing rates?
Most independent accountants cost between $100 and $275 an hour. You should ask what their rates are, and if that changes around busy times like tax season.
Many accountants are now shifting to “value pricing” which is a set cost instead of an hourly rate. This is a good thing because it gives you a clear idea of how much this is actually going to cost you and what you can expect.
How accessible are you?
How easy will it be to get in contact with your accountant? Will they respond to email queries? How quickly can they get tasks done?
Who will I be working with?
If you’re talking to an independent accountant, chances are you’ll just be working with them. However, if they are a part of a larger firm, you might be working with a whole team of bookkeepers, accountants, analysts, and so on. So, it’s a good idea to ask who to be in contact with for different questions and concerns.
Familiarity with e-commerce
These days, this is especially important. E-commerce comes with all sorts of different financial issues, especially if you’re shipping to different states or countries. If this is a part of your business model, you should absolutely be sure your accountant has some knowledge of it.
So, there you have it. When you’re spending more time filling out forms than flipping pancakes, connecting with your customers, or whatever else it is that you love most about running your business, hiring an accountant will help you manage your finances and get ready for growth ahead!
Build your buzzing business with help from crowdfunded loans
When you’re looking to grow your business, ask your accountant if crowdfunding is an option for you. Crowdfunding with Honeycomb can help you attain capital while growing your relationships with your customers and marketing your business to the world - launching you into your next step.
Learn more about Honeycomb Credit crowdfunding for small businesses at www.honeycombcredit.com/grow and get more information by signing up below!