7 Signs You Need an Accountant

Personal finance management can be likened to a maze, especially as complexity increases in terms of an individual’s lifestyle. Whether it be conducting business operations, working as a freelancer or optimizing personal finance management, there inevitably comes a point when it becomes less feasible—and sometimes even less wise—to personally oversee all financial aspects. These are the top seven indicators to integrate an accountant into one’s financial situation.

Your Business is Expanding Quickly

Success is exciting, but too much growth leads to complex money handling that can easily go out of control. When your income starts to escalate, you are probably handling many transactions, several income sources, managing stock, as well as employees or contractors. Something that easily fit into a spreadsheet is suddenly too complex to track.

An accountant not only keeps your books balanced, they offer you insights into your cash flow, your profit and tell you where your business is most profitable. They also help you expand your business, making sure your infrastructure grows at a pace that isn’t bottlenecked by your finance.

Tax Season Fills You with Dread

If you find yourself lying awake at night thinking about the approaching month of April or worse yet, if you have missed due dates or owed penalties for inaccuracies, it is likely that you could use expert assistance. “Tax laws are ever-changing and the code involving deductions and credits has become so complex that even the most mathematically skilled person would find it overwhelming,” says Jennifer MacLeod, EA.

A competent accountant is up to date with the latest tax laws and how they can be used to optimize your taxes to the lowest amount legally possible. The benefit of using a competent accountant alone can be a huge savings in taxes for you apart from the feeling of relief you get from using the services of an expert.

You’re Spending More Time on Bookkeeping Than Your Core Work

Time is your most precious resource. As a business owner or freelancer, if you’re spending a significant amount of time on a weekly basis working with financial management software to organize your accounts, reconcile your accounts and prepare reports, you’re essentially spending time on something that isn’t your core competency.

Think about the opportunity cost—those hours spent doing bookkeeping could also be spent on things that help you generate income. An accountant will take care of the financial side of things because someone like you is excellent at other things.

You’re Facing a Major Life Change

Major life changes are often fraught with complex associated financial aspects. Marrying, divorcing, inheriting an estate, purchasing property, having children or retiring are just some examples of important life events that involve various aspects of taxes and finances.

For example, a change in your tax filing status could occur as a result of getting married, which might give you additional deductions. In a divorce, there are delicate matters to consider regarding asset division. You might be pushed into a higher tax bracket as a result of inheriting a sum of money, or you could need to plan your estate.

You’re Being Audited or Financially Investigated

Nothing is more frustrating and stressful than when you receive a notice of an audit or receive a financial inquiry from the tax department. Should this occur, it is essential to have a professional by your side. They know everything about an audit, including the paperwork, and can communicate directly with the tax department.

Even if you have not yet been audited, in a line of work or situation with a higher risk of audit, such as incurring large amounts of business expenses, filing home office deductions or handling a lot of cash transactions, it is quite helpful to have your tax returns reviewed by an accountant prior to filing to be sure everything is in order.

Your Financial Records Are a Mess

Do your receipts live in various drawers throughout the house, in your e-mails and in shoe boxes? Do you wonder whether the bill payment occurred and into which category a specific expense must be filed? Organized expense records are more than a nuisance; disorganized expense records have the potential to cause missed deductions, auditing headaches and poor business decisions.

To make future accounting and financial record-keeping easier, an accountant could also help set up systems thereof, and in some circumstances, even organize that backlog. Thus, systems would be created that make accounting manageable, and also provide access to necessary documentation at the correct time.

You’re making Major Financial Decisions

Thinking of a big purchase, perhaps involving Commercial Property or Equipment? Planning to attract Investors or consider a big business loan? Contemplating a sale of your business or a business combination involving another firm? These transactions create extreme tax implications that need to be assessed by an accountant or tax consultant.

An accountant can help you build models to simulate different sets of circumstances to determine the actual cost and benefits of your choices. They can also draw up the financial statements that must be produced to satisfy lenders or investors. This will be in the form that presents your financial situation in the most attractive possible way.

Actually, the sooner you involve an accountant in your life, the sooner you will be able to benefit from their help. If you see yourself in any of these seven signs, you should consider making a consultation appointment. Your future self will thank you.