Question

If was to hire an accountant for a small business (physio clinic max 4 employees)  should I hire them on a monthly basis (like a retainer) if so how much would that costs vs if they worked for us once a year (doesn’t need to be exact), are plan is to have a front desk receptionist that would be a book keeper so we don’t know how long how much we would need an accountant. Also what would they be able to do (responsibilities)? Honest to god I have no idea what exactly an accountant does I just know it involves  a lot of math

Second part to this is

Great lol so I talked to a lawyer today about how much it would be to incorporate. She told me about it and said there’s tax benfits which an accountant would know about. So my question would it be worth it from and accountant perspective to go incorporated right from the start? Or should we wait on that?

Answer 1

This is a question which is faced by many small businesses. As per my understanding, there is a trade off involved in hiring an accountant or a book keeper. For this we need to keep 2 things in mind:

1. Work done by an accountant and a book keeper

2. The Cost of hiring an accountant:

1. Work done by an accountant and a book keeper:

A bookkeeper handles your day to day transactional job that is sometimes done by the owner themselves or interns or less experienced employees as there is not much to do. However, Job of an accountant is not just to record the transactional details but also help in analyzing the data identifying the major costs and revenue points, helping with the management of working capital and investment decisions and most importantly Help with the taxes.

2. Cost of Hiring an accountant.

Hiring a full time experienced accountant can drill a hole in your pocket because they usually charge somewhere between $200 to $400 per hour which is a huge cost for a small business thats yet to be incorporated. However Book keeping on the other end can be done by a less experienced associate at merely $25-$50 per hour.

By keeping both the points in mind we can conclude that it is a good idea to hire a bookkeeper on a regular basis and a consultation from an accountant once a month or once a quarter. This way one can get the benefits of hiring an accountant and at the same time the cost will also be managed. Tip: Some people also use quickbooks these days as a software to record their day to day transaction. the software gives all analytical business information based on the data day to day transactions. This can help reduce the number of consultation of accountant and reduce pressure on the person who is doing the bookkeeping.

Coming to the second part. I agree with the lawer. An accountant can help you immensely at the time of incorporation of your business and the sooner you incorporate your business the better it is. Remember spending on an accountant is not an expense but consider as an investment as it will give you better returns.