You get much more than a number cruncher when you engage an accountant. Accounting professionals play a crucial role in various stages of a startup’s lifecycle. They help in creating business plans and setting up financial systems. Additionally, they handle audits and tax filings.
But that doesn’t mean you must pay accountants to hold your hand around the clock. Full-time accountants can be expensive at least $65,000 per year. Bookkeeping services or current team members must be delegated specific responsibilities.
So, when do you leap and bring an accountant to your team? We interviewed accounting professionals and CEOs about when and how to hire an accountant. Life of an accountant is a term associated with the total experience of an accountant. It is another detailed topic but we will discuss the basics first.
The first step is to determine what an accountant can accomplish for you. Let’s get started.
what are accountants?
Accounting is a broad term that refers to the complete financial management process. This includes recording financial information and synthesizing that information into meaningful reports for businesses and tax agencies.
Bookkeepers can handle the initial step in the financial process, which is recording financial transactions and creating financial statements. This is frequently a better-value alternative, especially for early-stage enterprises trying to cut costs.
accounting duties
Before you engage an accountant, determine what activities you require them to perform. An accountant’s primary task will be to keep your company’s financial records in order from month to month. This could include:
- Financial statement parsing looks for errors and opportunities.
- Auditing financial statements and records to guarantee compliance with the law
- Financial statement preparation for pitch decks and investor or shareholder reports
- Payroll and payroll taxes must be organized.
- Tax returns and other tax preparation papers are prepared.
- Making financial reports
- Collaboration with external auditors.
Accountants can also take on greater managerial responsibilities, especially in larger organizations. Accountants are frequently seen doing the following:
- Providing feedback on corporate strategy or strategic initiatives
- Creating and conveying financial predictions and budget projections to the board of directors or shareholders
- Developing procurement policies
- Managing other financial team members
Accountants frequently specialize in one component of the profession or become experts in a specific industry. If your company has a specific area of focus or intricate tax obligations, hiring an accounting expert in that field could be beneficial.
personality
Because of the wide range of jobs that accountants can be asked to perform, the most extraordinary accountants are detail-oriented as well as adaptable. According to Andrew Hoag, CEO of purchasing software business Teampay, the ideal recruits are accountants who can get their hands dirty while still thinking strategically.
“It is crucial to select a candidate who not only has the required expertise but can also begin executing their responsibilities right away, as Hoag stresses, “but also the flexibility to adapt and grow with the company.”
We work with many first-time finance personnel, and the challenge is cleaning up the mess — which takes some elbow grease — and then putting procedures in place to support the business’s growth. This necessitates some planning and strategy.”
So, who would Hoag be looking for?
“Ideally, I’d look for someone with day-to-day financial operations experience but a track record of achievement or diverse experience to demonstrate their adaptability.”
when to hire an accountant
Starting a business doesn’t necessarily mean you have to hire an accountant right away. In fact, many business owners are capable of handling tasks such as business planning, budgeting, and choosing the right legal structure on their own.
However, it is vital to have a bookkeeper on board from the beginning. Bookkeeping services ensure that day-to-day accounting transactions are properly tracked, and watertight financial management systems are established.
Countick Bookkeeping, for instance, offers monthly financial statements and bank reconciliation to help clients make informed decisions based on up-to-date financial information. As your business grows and transactions become more complex, it may be time to seek advice from an accounting team for help with tasks such as organizing loans or filing taxes.
When considering accounting services beyond basic bookkeeping, you’ll need to decide between hiring an in-house accountant or outsourcing to a personal accountant. It’s important to weigh the benefits and drawbacks of each option.
outsourced accountants
When looking for outsourced accounting services, you generally have two options: local CPA firms or outsourced accounting providers. Local CPA firms are a good choice for businesses that prefer a more personal approach and face-to-face interaction.
However, it’s possible that your local CPA firm may not have specialized knowledge in your particular industry. On the other hand, remote outsourced providers can provide accountants with niche knowledge. Still, you may receive a different level of personal attention than you would from a local CPA firm.
in-house accountants
If you prefer to have a hands-on approach to managing your accountant’s tasks and workflow, then hiring an in-house accountant is a good option. You can select someone who is enthusiastic about growing your business.
However, putting someone on the payroll can be expensive, as you need to cover their salary, benefits, office space, equipment, and taxes. Additionally, if you hire too soon, your accountant may have nothing to do, which can strain your finances unnecessarily.
Andrew Hoag suggests that a combination of in-house and outsourced accounting roles is also viable. You can continue to use outsourced accountants for bookkeeping and day-to-day operational finance while having a Head of Accounting or Controller overseeing the external team and managing the numbers.
helpful resource: how to find a competent tax advisor
how much do accountants cost?
When hiring an accountant, the cost is a crucial factor to consider. With high competition for accounting staff and a low unemployment rate of only 2.3%, as reported by U.S. News, finding an affordable accountant can be challenging.
Additionally, the accounting sector is growing at a rate of 10%, which is faster than the average growth rate of 8% across all sectors. Therefore, it’s important to keep in mind that finding an accountant at a rock-bottom price may not be feasible.
- Outsourced Accountant Fees
If you are considering hiring an outsourced accountant, it is important to inquire about their fees upfront. You can also request invoices from their recent projects to get an idea of their pricing structure.
Typically, you can expect to pay between $100 and $300 per hour OR $500-$1250/mo, with an additional small monthly retainer fee.
- In-House Accountant Compensation
If you are considering hiring an in-house accountant, the Bureau of Labor Statistics reports that the median annual pay for accountants in 2023 was $90,000.
While outsourced accounting services are often a more innovative financial option, keep track of how much you’re spending over the long term. If you rely too much on outsourced professionals, you may end up paying more in monthly fees than you would for an annual salary.
In that case, it may be a good idea to switch to an in-house accountant for better financial management.
the procedure for hiring an accountant
Hiring any professional is difficult, but hiring for tasks requiring specific knowledge is considerably more difficult. The secret to making a solid accounting hire is to do a lot of research before inviting prospects for interviews.
Accounting Job Responsibilities should be defined
Make a list of the responsibilities you expect an accounting expert to have. For example, you may wish to have an outside bookkeeper but have your in-house accountant oversee your financial management systems.
The list of frequent accounting chores provided previously in this article should assist you in determining the most pressing business demands.
Expert Advice
If you require an accountant to compile finances for public consumption, such as tax returns or external audits, you must hire a Certified Public Accountant, or CPA. You can engage a private accountant if you only require someone to handle internal business and reporting.
Job Descriptions in Accounting
Accounting is a highly technical profession that necessitates the use of specialized tools as well as soft skills such as communication. When hiring, it might be challenging to determine exactly what to include in the job description unless you are an accountant yourself.
It’s a good idea to look at sample job descriptions before creating your accountant job posting.
Screening for Pre-Interview Positions
Interviewing takes time and energy, both of which most business owners lack. It would be beneficial to establish a rigorous screening process for job applicants’ resumes.
Define must-have skills and qualifications and utilize them to eliminate resumes that fall short in the first round. Next, make a list of nice-to-haves and rank the remaining applicants in order, with the most qualified ones at the top.
With any luck, you’ll be able to find your ideal accountant without having to interview every individual on the list.
you may also like to read: how historic bookkeeping can help your business thrive
Questions for Accountant Interviews
Accounting interviews are difficult since asking the appropriate questions is one thing, but understanding if you’re getting the correct answers is another.
Prepare your questions and answers ahead of time. Some popular accounting interview questions include:
- What are the three basic budgeting methods? Please explain these to me.
- Explain this financial statement to me (select from the balance sheet, income statement, or cash flow statement).
- How might the Tax Cuts and Jobs Act affect our company?
- What does having negative working capital entail for the business?
- How do you compute runway and burn rate, and which financial statements are required?
- What exactly is the distinction between deferred revenue and accounts receivable?
- How do you calculate bad debt?
- Describe revenue recognition and the matching principle.
- How can you communicate complex accounting challenges to someone who doesn’t have a background in finance?
- What would keep you awake at night if you were our accountant?
more reading: how to choose the right bookkeeping software for your business
accountant skills and abilities to look for
Exact skill sets will vary according to an accountant’s specialty. However, certain personality traits and strengths run throughout the industry and distinguish successful accountants from those who struggle.
Analytical Skills
Both bookkeepers and accountants are analytical, detail-oriented individuals. Posting daily transactions and detecting accounting errors require a keen eye and intense concentration.
While virtual bookkeeping eliminates human error, accountants must still be able to check financial figures and make thorough judgments. Hire someone who isn’t afraid to get their hands dirty.
Packages of Software
Accountants must be Excel specialists as well as have advanced knowledge of ERP software such as QuickBooks or NetSuite.
You may also want them to be familiar with purchasing software as well as financial planning and analysis tools, depending on the scope of the work.
Communication Skills
Accountants are relied on by business owners and colleagues to solve difficulties. They are frequently the only person in the company with the necessary knowledge. Accountants must be able to relate to non-financial management colleagues and translate complex subjects into simple words.
Look for accountants who are comfortable using visual aids to back up their arguments and who provide solution-based solutions to queries rather than theoretical ones.
Verification and Background Check
Accountants have access to all of your company’s financial data and have complete control over financial reporting. You must not only pick an accountant you can trust not to exploit that data, but you must also trust them to provide balanced financial reporting.
When hiring, don’t go by instinct. Check references from previous jobs or use sites like CPAverify to verify CPA credentials. Companies such as HireRight will conduct background checks on candidates on your behalf.
“A good accountant is someone who can focus and pay attention to detail while also communicating well and working well with others.” Accounting Accidentally, Ken Boyd
recruiting an Accountant
After you’ve chosen and signed the appropriate individual, consider how to onboard them properly. This is especially important if they are the first member of your financial team, as you will want to build a firm foundation from the beginning.
Begin by preparing current financial statements for the new hire. An accounting service can assist you in organizing your statements. Don’t forget to grant the new accountant access to all existing bank accounts and accounting software.
On their first day, it’s important to introduce your new hires to the bookkeeping staff or services you have and ensure that clear roles and responsibilities are established within the financial team.
Determine a meeting and reporting schedule as soon as practicable. Meeting with accounting employees one-on-one at least once a month to review financial statements and performance is an excellent idea.
Finally, establish expectations for the type of advice you expect from the accountant, whether it’s cost-cutting advice, revenue optimization advice, or even fintech tool recommendations. Lay out how you want them to share this information as well.
“Many newly hired accountants prefer to begin at the bottom of the career ladder. If they don’t express this desire, it may raise concerns,” repeats Teampay’s Andrew Hoag.
After they have developed their own awareness of the business’s financial intricacies, they will go out to other departments to understand their needs. This gives recommendations for where they can continue to help the firm in terms of growth.”
conclusion
Knowing when and how to engage an accountant can be difficult, particularly for new business owners with minimal financial experience. A well-planned recruiting procedure will allow you to specify the type of expert you want to work with and how they can assist you in maximizing financial progress.
Hire wisely, and you’ll lay the groundwork for a finance team that will develop with your company and offer value in the long run.
At Countick, we have a team of skilled bookkeepers who use cutting-edge software to automate your bookkeeping.
Try Countick Now if you wish to keep better records.
