As a new startup, do I really need a part-time accountant or can software like QuickBooks do everything for me?
Perhaps a bookkeeper to input data into the software is all I need?
Bookkeeping software (like Quickbooks) is complimentary to an accountant, not an alternative.
Your business has financial, tax, and possibly payroll responsibilities. A qualified CPA will help you setup and maintain the appropriate financial records your business will need to meet all of these obligations.
You can read, research and learn to do all of these things by yourself or you can hire a CPA to guide/assist you in the process. For the vast majority of people, a good CPA is one of the smartest relationships you can establish early in your business.
In general, I would suggest at least having a bookkeeper. The primary responsibilities of a bookkeeper are to ensure that your financial data is accurate and current at all times. Also, the role of bookkeeping should not be reduced to just data entry. A good bookkeeper will have a strong working knowledge of the chart of accounts, debits and credits, journal entries, account reconciliations, bill processing and accounts payable, sales and accounts receivable, and sometimes even payroll processing.
Most small businesses utilize a bookkeeper to be in charge of the task of managing the monthly business finances and ensuring that the financial data is kept organized and current. Generally, small businesses will utilize an accountant (CPA) primarily for tax preparing purposes. It is very common for a business's bookkeeper to work closely with the business's accountant (CPA). The bookkeeper is responsible for preparing and providing the financial data in an adequate tax preparation status for the CPA at the end of the year. To summarize: a bookkeeper you work with on a monthly basis. An accountant (CPA) you generally work with on an annual basis.
When you utilize an accountant (CPA) and a bookkeeper, if the CPA has financial questions at the end of the year, they can be directed to the bookkeeper.
Yes, business owners always have the option of completing bookkeeping themselves. However, it is all too common, that bookkeeping is not made as high of a priority as it should be and finances become unorganized and sloppy, creating unnecessary headaches during tax season. Sometimes this even leads to reporting incorrect figures on your tax returns and can result in you having to file an amended return to fix the errors. All of which could have been avoided by hiring an expert (bookkeeper).
Another thing to consider is how important your time is to you? Especially since you are just starting your business - you are most likely already wearing several hats. Delegate the bookkeeping task so that you can spend more time focusing on the areas of your business that you are truly passionate about.
You probably don't need an accountant for a small business. Bookkeeping might be beneficial, depends on how good you are doing it on your own, and how much time you have to spend on it. A good tax adviser is a must before you do anything though, but it doesn't have to be an on-going retainer.
But it really depends on the type of business. If its a software development startup then I'd do my own books in QuickBooks or GnuCash until the business is up and running (and even after that), if its a retail store with a lot of inventories and large cashflows, then you'd probably be better with an accountant after all.
Also check out the local laws and regulations for your business structure. It might be that you're required to have an accountant.
Most Bookkeeper are qualified to be accountants. I would suggest you look for a bookkeeper first. Quickbooks is a software that generates financial reports (set up the chart of accounts proper). A bookkeeper can read and analyze financial reports and in turn provide you feedback. If you are lucky with the right bookkeeper, he/she may file your taxes for a small fee.
I am an Accountant/Bookkeeper
In my opinion it depends on the number of transactions involved and prevailing law in the country. I run a start-up with me and 2 programmers. Total number of transactions are around 4-8 in a month. Hiring a full-time accountant would be overkill. Better to use a tax consultant with hourly charges.
I just use Excel with columns, transaction detail, type - expense or revenue, payment mode details, date.
Every two months I send the Excel to an accountant, he updates the P/L account, Balance Sheet, etc.
I am from India, and it's mandatory for every company to get their account statements verified by a charted accountant before filing tax returns. So what ever tool/software I use, eventually I will have to pay an accountant to prepare/verify the account statements and then file the return.