There’s no standard rule regarding the best time to hire a CPA for your business. Rather, it more depends on when you’ll most be able to benefit from a professional accountant. If you own a small business, it’s likely that you handle nearly all the day-to-day operations on your own. But as you grow, your ability to do it all efficiently will lessen. No matter what stage of your business’ development you find yourself in, it may be prudent to ask yourself these questions:
How comfortable would you feel about your records if your were audited?
If the thought of the IRS paying you a visit gives you a miniature heart attack, you may be able to find some comfort in hiring a CPA. First of all, compliant bookkeeping will reduce your chances of being audited and having an accountable professional will help you retrace your footsteps in a worst case scenario.
Are you spending too much time with bookkeeping?
Businesses grow when the principles are out there interfacing with customers, developing products and improving the core competencies. If all of your time is consumed with paperwork, payroll and bookkeeping, then it might be a good idea to hire someone else to handle this relatively mundane aspect of the business.
Are you losing money and you don’t know why?
Having a clear financial picture of your company is key to improving your business. An accountant can give you an accurate snapshot of your cashflow and areas that need attention so you know where to focus your energies.
Are you thinking of restructuring?
Being a sole proprietor works for some businesses, but as you grow, you might want to think about incorporating. Choosing the right structure for your business can save you lots of time and money. A CPA can advise you on what’s best for you.
The bottom-line is that you should hire a CPA if you aren’t completely confident and comfortable with the numbers side of your business. This is a reality for many small business owners, since most entrepreneurs get into the business by following their innovation or passion and give little thought to bookkeeping. But accounting practices can make or break a business, no matter how ingenious your product is.