THE 3 ROLES OF YOUR EXTERNAL ACCOUNTANT

Learn how your external accountant can help you through each stage of your small business

Photo by Nik MacMillan on Unsplash

One thing you quickly realize once you start your small business is that now you have two jobs:

1. Your 1st job has to do with creating value to your customers; &
2. Your 2nd job has to do with running your office.

The problem with the second job is that most small business owners continue running the “office” themselves, even when they start getting more clients on board. Sooner or later, they have to hire someone to perform administrative activities…one of these being your accounting & taxes.

Before you go & hire the first professional or company to do your accounting, here’s what you need to ask of them to really get your money’s worth at each stage of your company:

• If your company is just starting out, what you really need to know is what are your sales, costs & expenses from a general point of view. At this point, your main focus should be geared towards increasing your sales & client base…your accountant should guarantee that all your transactions are being registered correctly & that your company is complying with its taxes.
• In every business there is a turning point, when all of a sudden you start selling more & receiving more requests from clients. Now you need more detailed information at a more frequent pace. It is at this stage that you will probably hire your own in-house Junior Accountant…now, your external accountant’s job is to revieweverything your employee registers & to help you comply with your taxes in the most efficient way possible.
• The third stage of your company has to do with growth. When your sales are growing & are more stable, you can probably hire a more experienced accountant now. At this point, your external accountant’s purpose will be to become your external Finance Director to help you make more strategic decisions.

Will this external accountant be the same person or company throughout these 3 stages? Probably not…you need to constantly be evaluating if they are still helping you make decisions with what they do.

Giancarlo Jiménez, founder of The Finance Course, is a Finance Professional with more than 13 years of experience in the field of Finance and more than 4 years of experience teaching about Corporate Finance in a Business School.

Want to learn how to interpret Financial Statements & Ratios to make decisions at your small business? You can Sign Up To The Free Course byclicking here!