The decision to retain a professional to maintain the financial records of your business and/or help you understand the story behind the numbers is certainly a big decision for many people, as well as a significant outlay of cash. When your funds are scarce, the decision to do it yourself seems to be the only choice. As with any decision, you can select between alternatives only if you have investigated and understood the alternatives.
Here are some points to consider when the question of retaining a financial professional arises:
- What is your comfort level and skill with numbers?
- What is your comfort level with taking responsibility for the submission of your financial figures to an outside entity? (IRS, a bank etc.)
- How familiar are you in the appropriate law and regulations?
- Would you be more productive running your business and hiring the outside help, or preparing your books and spending less time in your business?
- What services does the financial professional provide?
- What are the fees?
- Would you benefit from bringing in someone from the outside to provide a perspective other than your own?
The way you answer these questions will not only determine if you should hire a financial professional to assist you, but who that person should be. If you have the time and are confident in your financial ability, then you should be okay taking care of your books. You might need a tax preparer, and a franchised tax preparer might be sufficient. If you are confident in your ability to work with numbers, but your passion is with your business and its operations, then hiring someone who has the passion for the numbers and has the ability to discover the story that underlies the numbers will be adding a valuable resource to your team. Maybe all you need is a part-time bookkeeper to do the daily data entry to take the routine tasks off your plate, and you will be able to make sense of the numbers yourself.
As a business owner, you realize that if you were not tolerant of a certain level of risk, you would be “playing it safe” and seeking employment and receiving a bi-weekly paycheck. You are skilled in knowing how to arm yourself with all of the tools that you need to meet every challenge. A keen understanding of both the financial performance of your business as well as the operations of your business are basic tools that you need to continue to grow and meet the challenges of your business.
This article was written by Moshe Pelberg, CPA, a contributor to Howard Courier.
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