At a certain point in dealing with your personal or business finances, you may find you need to hire an accountant. Many people address these issues later than is wise, though. If you're starting to think you might need an accountant, here are 5 signs you probably do.
Unable to Answer Tax Questions
When you file taxes, you'll mostly enter data that's fundamentally from your accounting. Plenty of folks don't need an accountant to help them answer questions on their taxes. However, you can get to the point where you have so much going on that it's no longer possible to do taxes without also having an accounting system.
An accountant can help you organize your records so you'll have the right numbers and paperwork available at tax time. Likewise, they can assist you with ongoing tax issues, such as filing quarterlies or dealing with contractors.
P&Ls Leave You at a Loss
Tracking profits and losses is critical to nearly any enterprise and even many personal financial endeavors. If you can't speak to what the state of your P&Ls is, though, you're pretty much stuck in the dark.
An account will structure your records so you can enumerate profits and losses in a proper balance sheet. If you need to state them for reporting purposes, insurance reasons, submitting a business plan, or getting a loan, you can pull the balance sheet and give it to the appropriate parties.
Unexplainable Money Issues
Money issues can appear on the positive or negative side of your finances. Either way, any unexplainable money problem should have you worried. In the best scenario, the numbers are just messy and need some attention. In the worst scenario, though, you could be looking at evidence of theft or business fraud. You will want to figure out what's going on, and that's starts with good accounting practices.
Accounting Is Eating Your Time
Bookkeeping is work. Some folks love it, but even they may find it can get in the way of other tasks. Business owners frequently try to handle their books to save money, for example. However, they may find themselves doing so much accounting work it would be more cost-effective to hire a professional.
Major Changes Are Hitting Your Industry
The accounting requirements of many industries change. Sometimes, these changes are so sudden they can catch you off guard. Fortunately, an account can study the applicable rules for your business and help you comply with new regulations and taxes.