When Is The Right Time to Hire an Accountant?

As your business grows so should the way you manage your accounts. Here’s how to spot when it’s time to call in the experts.

How mature is your business? It’s an important question to ask because businesses, much like people, go through different stages of development. As they mature from childhood to adulthood their requirements evolve. What worked in the early days will not be sufficient as you start to grow. Nowhere is this truer than with your accounts.

The evolution of your accounts

In an ideal world, your accounts provisions should expand to match the lifecycle of your enterprise. In its infancy, you are not only leading the business, but you are the business. You’re fulfilling just about every role from shaping strategy to driving more sales and even making the tea.

You are also your own accounts department. This makes sense. Money is at a premium and as your fledgeling business takes its first shaky steps, your accounting requirements aren’t particularly onerous. All you need is a calculator, an Excel spreadsheet and a decent memory.

All being well, though, things will soon start to change. Money comes in, you start to hire new people and everything becomes a little bit more complex. As your business grows from infancy through adolescence and on towards adulthood, you’ll increasingly need services which go a step beyond basic bookkeeping which is when you’ll start to need an accountant.

This is where many businesses make their first mistake. They wait too long before they make the chance and that can cause all sorts of problems. Mistakes become more likely and more expensive and you’ll spend so much time with your head buried in spreadsheets that you’ll forget to take care of everything else. So here are a few signs that it’s time to make the leap.

You have no time

Fulfilling every role in an enterprise is time consuming – all the more so when it starts to grow. Entrepreneurs are accustomed to hard work, early mornings and late nights, but when day to day operations distract you from your real goals, that’s when things start to go wrong.

The service you offer might start to suffer, opportunities are missed and your growth begins to stall. Meantime, your stress levels are rising and rising fast. It’s a common complaint among entrepreneurs. Most will have started a business because they love the work, not to spend their time staring at spreadsheets.

If this is happening you need to start investing in people to take the load off your shoulders. Not only will it make you feel a lot happier about life, but your business will feel the benefit.

You’re making money but no profits

Money is coming in, business is booming, the only thing missing is any profits. It’s a perplexing situation for many entrepreneurs. You may feel as if your business is hitting all the key objectives it needs to in order to become successful.

The solution will probably lie in your accounts. Unfortunately, you’re not the most qualified person to see this. It could simply be that you’re making accounting errors which understate the true position of the company, or you may not be controlling spending in one area.

A good accountant is perfectly placed to take an objective view of your accounts, identify any areas of waste and advise on the best path forward. If there are mistakes, they can be identified and rectified quite simply.

In many cases, the root of the problem lies in your cash flow or lack thereof. It’s easy to mistake brisk trade for money in the bank and many businesses fail to manage their invoices effectively. They can show what invoices have been paid, which are outstanding, and which are overdue.

You’ve Experienced Rapid Growth

If all’s well with your business it will start to grow pretty quickly, but that brings its own problems. The faster it grows, the more complicated its finances become. You can quickly be overwhelmed and many of the problems we’ve already discussed become that much more severe.

While many businesses will look at the people and equipment they need to manage rapid scaling, they overlook the organisation. You need someone on board whose sole focus will be to keep the numbers in order.  

While that will inevitably have a cost – whether it comes through recruiting an additional staff member or hiring the services of an accountancy firm – the value repays itself across the board.

First, think about the amount of time you spend on mundane tasks. As the leader of your business, you are its most valuable resource and you should value your time appropriately. So, if your hourly value to the company is £100 per hour, that’s a huge amount of money to be spending on tasks which could be outsourced to specialists at a cost effective rate.

To think about it another way. Your time is best spent shaping the direction of your company. Every hour spent on other areas represents an impact to your company’s bottom line performance. If you wait too long before you hire an accountant you risk doing lasting damage to your country’s finances.