What Type of Accountant Does Your Business Need?
Savvy business owners know that a critical piece of running a business smoothly, effectively, and with as few hiccups as possible is managing the books. That task can be taken on by existing team members, or the business might decide to hire an accountant.
But wait: what type of accountant should you hire? Should you look for a general or staff accountant? Can that person cover all your accounting needs, or do you need someone more specialized like a forensic accountant or an auditor?
Determining which accounting disciplines your business should look for is kind of like deciding which doctor to call when you’re not feeling well. You can always call your general practitioner, but there are specialists available if your GP isn’t able to address your specific health concern.
Before we get started on different types of accountants, let’s make sure we’re clear on what we’re looking for. An accountant (of any type) is:
Accountant: “A practitioner of accounting or accountancy, which is the measurement, disclosure or provision of assurance about financial information that helps managers, investors, tax authorities and others make decisions about allocating resources.”
An accountant uses financial data from a business to create models and make recommendations. Accountants work on things like preparation of financial statements, tax returns, and cost analysis, as a means to advise business leaders on financial projections and tax planning.
However, Accountants Are Not to Be Confused With…
- Bookkeepers, who record daily transactions and are the keepers of the general ledger. They own the upkeep of the master list of transactions. Accountants take the data bookkeepers create and use it to make financial models and recommended actions for the business.
- Chief Financial Officers (CFOs), who are responsible for the broader financial strategy of a company, including management of staff, risk assessment, budgeting, and staying abreast of financial legislation. Accountants generally report up to the CFO, who would make decisions on whether or not to take action on an accountant’s financial models and recommendations.
- Consultants, who are not employed by the company but may be retained on a contract basis to provide accounting advice, in lieu of a permanent hire. A consultant may have the same skills as an accountant.
- Accounting software, which is generally cloud-based and can automate the work associated with accounting tasks. However, there is still human oversight required with accounting software, whether it’s an accountant or another staff member. Many accountants (regardless of discipline) use accounting software to reduce the manual effort involved in daily accounting.
Does My Business Really Need More Than One Accountant?
At the outset, the answer is probably no. Small businesses that are not in highly-regulated industries can manage with a general accountant or even accounting software.
As the company grows, there may be a need for more specialized accounting. Make sure to check in with company executives frequently to determine their financial concerns for the company—and share your own. You can use them as your guidepost for when to engage specific types of accountants.
Ready to learn how StartLightSoft can help you manage your accounting with cutting edge software? Request a demo and see how StartLightSoft can work for your business.