Do I really need an accountant?


8

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?

Getting Started Financial Bookkeeping Accountants

asked May 24 '12 at 07:30
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Anon E
41 points
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  • If you are in US, good bookkeeper who was a controller before, has the right education, and understands your business is not that hard to find. Part time is all you need. CPA you need once per year at tax time. I spend about 1% of my total sales on accounting and CPAs - small price to pay for peace of mind. – Apollo Sinkevicius 9 years ago

5 Answers


6

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.

answered May 25 '12 at 05:02
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Keith De Long
5,091 points

3

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.

answered Oct 31 '12 at 11:37
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Crunch Sum
41 points

1

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.

answered May 24 '12 at 08:21
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Littleadv
5,090 points
  • -1 - it is SO easy to miss something an then yo uare ina lot of pain. Plus it takes vluable time. THe price for an accountant doing tghe legal side is miniscule. – Net Tecture 10 years ago
  • Don't confuse accountant with a tax adviser, these are different animals. You can hire an accountant to setup your books, as @Keith suggests, but keeping a part-time accountant for long periods of your work? What for? I mean, for people who don't even know grammar it maybe a real need, but for a regular Joe with a had on his shoulders its an unnecessary expense except for certain cases. – Littleadv 10 years ago
  • My software company is 17 years old and we've never had an accountant, and never needed one. I do have the benefit that my wife (who is not trained in that) enjoys it and is quite good at it. There are lots of benefits to doing it yourself : you know your business much better than an accountant and it's cheaper in the long run *if* you have the time. If you have more money than time, then yes, hire an accountant to SET UP things for you. – Clay Nichols 10 years ago
  • -1 since it is going to be vital to have an accountant (this is just a term, it can be tax advisor, etc.) who can advise you about important tax (and certain legal) aspects of your business. You don't have to have a full-time accountant, but I would consider consulting with an accountant (spend 1-2 hours = $100-$200) to explain your business so the accountant can advise you what to do and how. Then you can do bookkeeping, etc. on your own after that and then just return to the accountant to prepare taxes or if anything new happens in your business. – Vasiliy 10 years ago
  • @Vasiliy, I don't know why you say that accountant and tax adviser are the same. Ridiculous statement. Also, the question is about having an accountant on retainer, not an adviser in general when needed which is indeed vital. Please reconsider (not that I care about the votes, but do educate yourself). – Littleadv 10 years ago
  • @littleadv, you need to start reading comments before you provide an answer: "an accountant (this is just a term, it can be tax advisor, etc.)" This is what was said, which I can explain further. Accountants and tax advisors are titles, captions. An accountant CAN be a tax advisor when he/she services his clients. An accountant is a very broad term, so it doesn't really matter what the person who advises you is called. – Vasiliy 10 years ago
  • @Vasiliy, I understand that as an accountant it is difficult for you to conceive that tax advisory and accountancy are two different and separate things. It is true that a single person can do both, but it is completely irrelevant to the OP. The OP explicitly asked about a **part-time accountant**, not a tax adviser, not a consultation, not a meeting to set up the books. I would expect a CPA to be able to actually read before responding. – Littleadv 10 years ago
  • @littleadv, a part-time accountant can perform bank recs and provide tax advice about when (i.e., in what year) to buy fixed assets to maximize deductions, etc. at the same time. I don't see why the two must be different. If I were in the place of the person asking the question, I would get a part-time accountant or better somebody on a contract basis (1099) who would advise me what and how to do stuff. The person would advise about what docs to keep, how to record transactions, etc. and then I would use that knowledge to do this stuff myself. – Vasiliy 10 years ago
  • @Vasiliy, undoubtedly it won't **hurt** having a part-time accountant, except for the cost. The question was "Do I really **need**" one, not "whether it is a good idea to have one". Do understand the difference. – Littleadv 10 years ago

1

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

answered Nov 13 '12 at 09:59
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Kiamona
31 points

0

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.

answered Oct 31 '12 at 19:17
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Aseem Gautam
331 points

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