Does Your Business Need an In-House Accountant or a CPA Firm?

It takes a lot of hard work, time and skill to keep a small business running smoothly, day to day. There are so many tedious tasks that take time away from the important work that needs to be done. Even if you have all the brains and brawn to wear all those different hats, trying to take care of everything yourself could soon become very overwhelming. When you get above the 1M revenue mark (or around 4-10 employees), you may start straining to complete all your transactional financial tasks, while companies above the 5M mark (or around 11"+ employees) might find themselves looking for more assistance when it comes to big-picture financial planning.

If your budget allows, you could hire an in-house accountant. An in-house accountant is a great choice for the “back-office” accounting tasks like payroll, accounts receivable and accounts payable, financial statements and reporting, and credit card receipt tracking. This may be all you need, especially if they can take care of filing your tax returns with the IRS and make an effort to stay up to date on tax laws.

However, if your business requires advisory services or tax planning guidance, you may need the help of a CPA firm that can take care of all your accounting needs. The advantage of a CPA firm is that they have staff to take care of back-office tasks and other professionals who specialize in business advisory services or tax services.

There are a couple of things to consider before you make a decision about which accounting service/professional would be more feasible for your budget.

1. An in-house accountant may be more convenient, but is it cost effective? You will need to calculate the cost of wages, benefits, workspace, rent, utilities, equipment, and software, as well as other supplies. All of these things will need to be updated from time to time too. If your employee needs time off, do you have another employee that can step up and take care of the books or will you need to make the time to do the job yourself?

   You may also need to consider whether you need help with cash flow management and planning, forecasting, company-wide KPIs, etc. These tasks fall out of scope for most staff accountants, and a senior accountant or a CFO may be needed to perform business growth related financial tasks. These roles come with a higher salary.

2. Outsourcing your business accounting or bookkeeping tasks to a traditional or virtual CPA firm may be more cost effective than you think. You may be able to save on some of those business accounting tasks you need from an in-house accountant. In addition to services such as tax preparation and planning, an accounting firm can provide cash management strategies, company-wide KPIs, industry benchmarks, and offer other professional advice on how to grow your business and make a profit. Hiring a CPA firm will give you more time to provide quality service to your customers instead of being buried in paperwork.

A virtual CFO service like Summit Virtual CFO by Anders will provide you with insights you may not ordinarily receive from a traditional CPA firm. Our profit-focused approach to accounting allows business owners to create a dynamic road map to reach their growth goals in a sustainable way.

As a business owner, it may become difficult to keep track of your financials while trying to grow your business. If you need a trusted advisor to help with business taxes, financial planning or business consulting, feel free to reach out to us and schedule a free consultation with our virtual CFO team.