If you're a small business owner, you understand that running a business involves a number of moving parts. Keeping these parts moving means micro-managing everything from clients and marketing to administrative tasks and company finances. So, it's no surprise that business owners often feel like their attention is being pulled in multiple directions at once.
A simple and straightforward way to manage the multiple parts of running a business is to outsource fiddly, time-consuming tasks to someone else. Hiring an internal business accountant to help you with your cash flow and financial management can make a huge difference to your company's growth by freeing up your attention to focus on other things.
If you've been struggling to manage multiple moving parts, the benefits of hiring an internal accountant or a business advisor to plan how your business should earn and spend money strategically cannot be overestimated.
In this post, we'll run through what you can expect an accountant to assist you with and why you might want to hire one either full-time or on a retainer basis. We'll also explore alternatives to hiring an internal accountant—such as using an external business accounting firm—and lay out everything else you need to know to make the final call.
At Liston Newton, we're experts at helping business owners solve their issues with time management and cash flow. Get in touch today for personalised, practical advice.
What an accountant can do for your business
No matter what stage of growth your business is in, an accountant can typically help you:
Get on top of finances
An accountant can identify and measure key business metrics for you, including the optimal ratio of salaries to total revenue. They can also help you manage payroll and migrate your business to cloud-based accounting software, such as Xero. They can produce tables and charts that will enable you to stay abreast of your company's current financial situation without going into the nitty gritties of number crunching.
Prepare your tax documents
An accountant can prepare and file your taxes for you, which can be a massive time-saver if you run your own business or own several large investments. They can often handle other government-related matters on your behalf, too. For example, an accountant can prepare annual statements of accounts for your business or keep your company's status updated in the government's company register.
Manage your payroll
A lot of time can get sucked up looking after the payroll of a small business. An accountant can help you handle the hiring of new employees and taking care of the related paperwork, thus ensuring that everyone's tax codes and payments are recorded correctly. They can help you understand the rules and regulations associated with paying salaries and wages and ensure that you are always achieving compliance.
Seize opportunities for growth
An accountant may be able to provide you with strategies for successfully growing your business through financial analysis and can assist you with applying for funding from banks if your business is growing. If you sell or merge your business, they can help you structure your financial affairs to guarantee that you get the best terms and conditions possible.
Create a business plan that's more likely to succeed
Hiring an accountant to help you write or rewrite your business plan will help you make sure it includes the right information about how you will finance your business, costing, and financial projections. If your business is just starting out and you're using expected figures for turnover and finances, an accountant can help you indicate this and use specialised software to add financial projections and other reports.
Nut out your business's legal structure
An accountant is the best person to familiarise you with the range of legal business structures available and help you choose the one that best suits your needs.
The pros and cons of internal accountants
The advantages of getting an internal business accountant include improving operational efficiency and increasing the value of your company, as an accountant will often be able to determine areas where costs can be cut without affecting the business. In addition, you'll be able to rely on accurate accounting for tax compliance purposes and enjoy having an expert keeping tabs on your finances at all times.
The cons are less straightforward and primarily relate to skills and qualifications. A highly qualified accountant who can handle complicated tax returns and provide good quality CFO advice is unlikely to want to complete your more basic bookkeeping and admin tasks. Internal accountants can be a major expense for small businesses, and it's easy to make the mistake of asking them to perform basic, day-to-day activities which could easily be delegated to a bookkeeper or external accounting agency.
We often see clients who have hired an internal business accountant in the hopes that they will handle all of their bookkeeping and accounting activities only to quickly realise that it is extremely rare for one internal accountant in a small-to-medium sized company to be able to handle all these roles and perform them well.
What's the best choice?
The best strategy to adopt when weighing up the pros and cons of hiring an internal accountant is to think carefully about which accounting activities you would like them to focus on (and what will best benefit your business).
How our team can help out
At Liston Newton, our team comprises business accountants who offer a full range of financial services. We can help you with everything from tax planning to franchise valuations. But we're not just accountants—we also offer business strategy and financial advisory services to help our clients set long-term financial goals while staying on top of their numbers.
We assist you in every way we can by looking at your specific business needs and financial considerations. We tailor our advice and services; for example, if a business already has an internal bookkeeper, we might assist by offering higher level taxation and management accounting advice to fill in any gaps in financial planning. Alternatively, if a business has a higher level CFO in their team, we can take some of the basic, day-to-day bookkeeping and admin tasks off their hands.
Recently, Yarra Energy Foundation sought our advice about whether they needed an internal accountant to assist with their bookkeeping, payroll, and CFO direction. They also wanted someone who is able to offer ad hoc input on financial matters at their board meetings.
- We advised them that the skills they were seeking were unlikely to be found in one person.
- They were ultimately better off hiring a specialist bookkeeper for payroll and bookkeeping tasks, and seeking taxation and CFO advice from a senior accountants at Liston Newton Advisory.
- We were able to meet their needs by referring them to our sister company, BiggerFish Bookkeeping, and providing tailored taxation and CFO advice from our senior accounting team.
Ultimately, if you've been asking yourself whether you should hire an internal business accountant, the right answer will largely depend on why and how you plan to implement their services. We can help you flesh out the right decision for your business.