When to hire an accountant for your small business

Small business owners often hire an accountant during events that require deep accounting expertise, like a funding round or audit, or during tax filing season. Some hire an accountant to free up time and focus on more operational duties.

You may be wondering, “Should I hire an accountant for my small business?” After all, you have plenty of other jobs to do, from overseeing sales and marketing to planning your business’s growth.

To help you decide, we cover when to hire an accountant, the qualities to look for when selecting an accountant, and more.

Does a small business need an accountant? What to consider before you hire

Hiring a small business accountant is a significant step in building out your business’s financial operations. While not every business needs full-time accounting support from day one, an accountant can reduce your administrative burden and help with taxes, reporting, and strategic planning.

Here are a few key factors to consider before bringing an accountant onto your team:

• Level of financial support: Are your financial needs still relatively simple, or are they becoming more complex? Bookkeepers handle day-to-day transaction tracking, while accountants interpret that data for tax filing, compliance, and long-term planning.
• Budget: If you don’t have the income to bring on a full-time accountant, you might start with a part-time hire or an accounting firm. These options can be cost-effective in the early stages of your business.
• Business size: What’s the current size of your business, and how quickly is it growing? A larger business structure or fast-scaling organization may benefit from dedicated accounting support to improve financial reporting and guide strategic decisions within your business plan.
• Tax situation: Are your business taxes straightforward, or do you deal with frequent deductions, quarterly filings, or multi-state operations? If it’s the latter, an accountant can help ensure compliance and identify tax-saving opportunities.
• Current accounting expertise: Does anyone on-staff already have a solid grasp of bookkeeping and financial reporting? If not, hiring outside help can reduce the chance of accounting mistakes and free up time for other operational duties, like managing invoices and improving revenue streams.

How much does an accountant cost?

The median pay for accountants is roughly $39 per hour or $81,600 per year, according to 2024 data from the U.S. Bureau of Labor Statistics (BLS).

Salary can vary by industry and region, with those in finance and insurance earning a median wage of just under $88,000, while those working at companies and enterprises earn about $86,000. Per Indeed, accountants in New York and Denver, Colorado, report the highest average salaries, in line with areas with higher costs of living.

If you want to hire a full-time accountant, you’ll need to factor in that person’s salary, benefits, and other compensation. Outsourcing accounting duties to an accounting firm or hiring a part-time accountant can be more cost-effective in some instances.

When to hire an accountant for small business

Certain business milestones or financial situations can signal it’s time to bring in a professional for your small business accounting needs. Here are a few instances where it makes sense to hire an accountant:

You’re entering a funding round

Whether you’re raising money through a traditional funding round or using programmatic funding, an accountant can ensure the influx of capital flows into your financial statements correctly and establish appropriate reporting practices. The right accountant can also make projections and run reports to secure future funding rounds.

You need help during tax season

Even if you’re comfortable filing your own business taxes, hiring an accountant can save you valuable time and reduce the risk of costly errors. A knowledgeable small business accountant may uncover additional small business tax deductions and recommend strategies that lower your overall liability. They can also guide broader financial decisions that improve your long-term tax position.

Your FP&A requires better inputs

Financial planning and analysis (FP&A) relies heavily on accurate financial data and reporting. Accountants provide the foundational inputs FP&A needs to analyze performance and guide strategic decisions. A good relationship between accounting and FP&A can lead to more innovative and effective financial management, especially when assessing cash flow.

Your business faces an audit

While no business wants to hear that the IRS is reviewing their financial records, having a skilled, certified accountant on staff can make it a much smoother process. An experienced accountant will ensure your balance sheet and other financial documentation are in order and help guide you through the audit with ease.

What to look for when hiring an accountant

Here are some qualities to consider when hiring an accountant for your small business, whether it’s in-house or through a third-party firm:

• Billing structure: Will you pay for their services hourly, on a retainer rate, or on a project-based fee? It’s important to understand how much an accountant charges and how they assess their fees.
• Services provided: Some accountants specialize in services like tax preparation or payroll management. Make sure the person you work with offers the accounting services your business needs and has the flexibility to support your growth.
• Experience: Look for an accountant with experience working with businesses like yours, particularly in terms of industry and business size. Their understanding of your unique challenges will help make managing your business finances easier.
• Certifications: While hiring an accountant with a certified public accountant (CPA) license typically costs more, the designation signifies they have more training and experience. Other valuable certifications to look for include chartered accountant (CA), certified management accountant (CMA), or enrolled agent (EA).
• Communication style: Choose an accountant whose communication style aligns with your own, whether that’s weekly phone calls, meetings, or daily email correspondence. If they work for a firm, ask whether you’ll communicate with them directly or through an assistant.

Automate your accounting process with Ramp

Hiring an accountant is just one step toward improving your business’s financial operations, but you can take it a step further with automation. Ramp’s AI-powered accounting automation software simplifies your accounting workflow, improves accuracy, and reduces time spent on manual tasks.

Our business accounting software automatically categorizes and codes expenses based on historical transaction data, eliminating repetitive functions and reducing the risk of errors. It also speeds up your month-end close by automating transaction reviews and flagging issues, like missing receipts or miscategorized expenses, to ensure your data stays accurate and compliant.

As your business grows, we scale with you. Ramp offers real-time data syncing and integrations with platforms like QuickBooks and Xero, giving you an efficient, reliable foundation to manage your finances.

FAQs

Can I be my own accountant for my small business?

Yes, many small business owners start out managing their own accounting. However, as your finances become more complex, hiring an accountant can help you stay compliant with small business tax laws, financial regulations, and reporting requirements.

How often should you see your accountant?

It depends on your business’s needs, but many small business owners check in with their accountant on a monthly or quarterly basis. At minimum, you should connect during tax time and before any major financial changes.

Will an accountant save me money on taxes?

Yes, an accountant can help you identify tax deductions, credits, and strategies that lower your overall tax liability. They also help you avoid tax errors and penalties, which can add up over time.

Is a CPA better than an accountant?

While accountants and CPAs handle many of the same tasks, CPAs complete licensing and certification requirements through their state and meet ongoing education requirements. A CPA may be a better choice if your business requires highly complex tax planning or if you're facing an IRS audit. A general accountant can be a great option for more straightforward accounting tasks.