How much does it cost to hire an accountant for a small business?

Even in your average small business (1-3 employees, less than $500k turnover) there will be a broad range of options for accounting and finance including getting specialise setup, tax structuring advice, finance systems and processes together with the everyday bookkeeping and accounting functions.

Is an accountant needed for a small business?

An accountant can offer comprehensive startup and ongoing small business advice, while making sure tax compliance is prepared and filed with the relevant authorities on time.

What is the role of an accountant in a small business?

Being a business owner can be a tough job, and it’s good to have a trusted advisor to lean on in times of complexity or uncertainty. An accountant will be able to help you navigate your business through these times, and help keep compliant with relevant tax authorities.

Xero is an integrated accounting platform that can complete all small business invoicing, receipts, bank transactions and reporting for the IRD. Being cloud based means your advisers can have access to your information in real time.

Is Xero Accounting any good?

Xero is a great tool for small businesses as it gives you real time access to the financial data of your business - information we couldn’t imagine being in business without.

Why don’t my Annual Accounts match Xero?

With accounting software now firmly entrenched in the cloud it’s worthwhile to revisit the benefits of having a single ledger, or a single point of information for your accounting records:

Collaboration - better information sharing between you and your finance team
Flexibility - can communicate from anywhere and in real time
Save time - no need for any adjusting entries between systems
Process review - Finance team can communicate back on financial processes within your business

Adjusting Journals are Evil

In the past a business would have a separate accounting system running at their office, while the accountant would take a copy at year end, make any adjustments and send an adjusting journal back to the client to make sure their figures were up to date.

The only problem with an adjusting journal is nobody remembers what they mean.

The client would often be left in the dark as to what the updated figures meant, and not being tied to regular operations such as invoices and purchases it’s often hard for the accountant to track back and determine what was actually being done to certain accounts.

Adjusting Journals more Common

Even though more businesses are using cloud based software such as Xero, we’re still coming upon clients who receive annual financial accounts and tax returns that don’t accurately match to whats online in the accounting system.

Some accountants are still using the old system of adjusting journals, or not adjusting the clients accounting system at all.

This is because accountants are using separate software to draw the information out of Xero and not keep the single ledger accurate or well informed.

Why this is dangerous

You’re not seeing what is being filed with Inland Revenue, and if you are to take online information to investors, lenders, or even judge the performance of your business then this might not be accurate.

If your online information isn’t being updated, nobody might be reviewing or checking your financial processes are giving the right information.

What to do

When you get a set of financial accounts it’s useful to check that you can see this information online. Also ensure that you understand any end of year adjustments posted by your accountant so you can accurately determine how these affect your business.