Ideally, the best time to hire an accountant is when you’re first setting up your business. A Certified Public Accountant (CPA) brings valuable knowledge not only about the tax code but also about state-specific processes for registering your business. They can ensure that your business is set up correctly from the start, optimizing tax classifications and maximizing benefits for the owners.
Hiring a CPA even before you file your articles of incorporation might feel premature, especially for small businesses or cottage industries where resources may be limited. Many entrepreneurs start out relying on resources provided by the secretary of state’s office, which often offers detailed guidance on registering a business name and getting the basics in place. These services are designed to be accessible to non-professionals, encouraging entrepreneurship and generating revenue for the state.
However, the question remains: When is the right time to hire an accountant? The consensus is that if you meet any of the following five criteria, it’s time to start looking for professional accounting help:
1. Struggling with Expense Classification
If you’re having trouble distinguishing between operating expenses and capital expenditures, it’s a sign you could benefit from professional guidance.
2. Difficulty Managing Cash Flow
When tracking cash inflows and outflows becomes complicated and you can no longer present them in a clear format, it’s time to seek help.
3. Tax Preparation Anxiety
If the thought of preparing your business taxes makes you sweat, or you’re unsure about the impact of your business structure on your tax obligations, this is a clear signal to bring in a CPA.
4. Feeling Overwhelmed and Spread Thin
As a business owner, you wear many hats. If you find that managing every aspect of your business is leaving you with no time to focus on what you do best, hiring an accountant can free up your time and relieve some of the pressure.
5. Issues with Invoices and Payments
If you’re struggling to stay on top of invoices, making late payments, or failing to collect payments on time, an accountant can help you get organized and avoid cash flow issues.
Conclusion
Recognizing these signs early is key, especially when it comes to tax preparation, where getting help sooner rather than later can prevent bigger problems down the road. Keep in mind that most accountants are in high demand during tax season, so plan ahead to avoid the last-minute rush.
Hiring an accountant might seem like an expense you can’t afford when you’re just starting out, but the long-term benefits can far outweigh the cost.
Lastly, consider 2KD when ready to make a capital expenditure on developing your website, and the reasons why it should be classified as a capital expenditure.
