Pros and Cons of Hiring an Outside Accountant

You have enough responsibility running your business. When it comes to keeping track of your monthly cash flow or your tax responsibilities, it may be a sound investment to hire an outside accountant to handle these tasks on your company’s behalf. If your business is set up as a sole proprietorship you may think you can do without hiring an outside accountant. After all, your books are easy enough to keep up with.

Benefits of Hiring an Accountant

Even if you are a small business or a sole proprietor and you really can manage your bookkeeping, business employee benefits, and tax filing on your own, think about what might happen if you make a slight error. If you do not have a professional second set of eyes to review your work, you may be in for, at best, a short-fall with your income due to the mistake you made in budgeting. At worst, your tax estimate mistake could raise a red flag for getting audited.

The time and money an audit could cost your company would certainly take you away from your regular duties. The money that could cost you is one thing. The money you might find yourself needing to pay back to the Internal Revenue Service is another.

These are some reasons why you may find it is beneficial to have an accountant on your side. Perhaps they will be there to file your yearly or quarterly taxes. But once you form a good bond with an accountant you can trust, they can also be available to offer you invaluable advice during the course of the year.

If you are about to change over from cash method bookkeeping to accrual method, you have a professional you can consult who can make sure this is the right move. Your accountant may be even able to let you know, if you are a brand-new business owner, that doing such a switch is not necessarily possible without plenty of notice and a few additional steps to make this official. Of course, this is a broad generalization of what an outside accountant can help you with, but especially if you are a new business owner you really cannot afford to do without an expert on your side.

An outside accountant can help you make costly mistakes in the overall funding of your business, never mind help you avoid mistakes that can cost you more in state or federal taxes. Also, when it comes to having good records on file for years to come, an outside accountant can be a real blessing. Naturally, there are some disadvantages to hiring outside accountants.

Disadvantages to Hiring Outside Accountants

An outside accounting firm will of course cost your company more money. Again, if you are a sole proprietor and you really have a handle on your own books and tax forms, you want to be careful before you run out and hire an accounting firm. You may want or even need to wait a few years to do this. If your business continues to expand, there may come a time where outside accounting help is inevitable.

Furthermore, hiring outside accounting firms cost more money. Also, depending on how far they are from your business’s location, you may feel more comfortable having your records and those who oversee them in your office or office building. This way you can allow the trickier jobs to go to your accountants, but at the same time keep an eye on all that is going on in your business’s financial and tax affairs.

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