We’ll cut straight to the chase: yes, an accountant is totally worth it for your LLC! They’re not just amazing resources for managing your finances, but they help you track your growth and plan your business’s trajectory. Some people suggest waiting for an accountant until your business has made a certain amount of money, but in our humble opinion, it’s always wise to arm yourself with financial prowess as soon as possible.
Do I Need an Accountant When Forming my LLC?
Forming a Limited Liability Company, or LLC, is relatively simple, but for most people, starting your finances off on a good foot isn’t. While establishing and starting your business could be as easy as starting to sell your product or service, managing your finances requires a few steps that, if missed, cost money and headaches during tax time (and pretty much every time you try to look at your budget). Without the proper accounting system, you could be spending more than you’re earning, and end up in severe debt without ever catching it before it went downhill.
Long story short, we suggest you have an accountant when forming your LLC, and we’re going to show you how to find the perfect one.
The Best Time to Have an Accountant
There are lots of times when you could put the cart before the horse in your business, like worrying about a company name before you even know what you’re going to sell. But when it comes to financials, it’s never too early to project, plan, and manage your money.
Think about the upfront cost it takes to purchase a website subscription. You won’t necessarily see direct returns from it (unless you’re running ads), but you know it’s vital for getting traffic to your product and legitimizing your business. Hiring an accountant is similar. You might not see an initial return on investment immediately, but without it, you have no way of tracking how your business is doing. Starting out on the wrong foot could forge a continued path of rocky roads, so the best time to have an account is as soon as possible!
How to Hire The Right Accountant for Your Business
Knowing you need an accountant is the first step. Knowing which accountant will suit your needs is another. Here’s how to find one that’ll help your business grow:
Outline what services you want them to take on.
Think about what you’re doing now that’s stressing you out. Is it managing budgets? Prepping for filing your tax return? Allocating funds for taxes at the end of every month? Or the whole shebang?
Particularly when you start your business, having the right guidance on how to budget your money properly will narrate the way you do business as your LLC grows.
So, when looking for an accountant, it’s important to know what your biggest pains are and find someone who specializes in that particular part of your business. You can find firms that focus on specific niches, like an accountant for LLCs and small business owners, eCommerce, or B2B services. Find one that specializes in LLCs, and who has experience working with any particular issues you might be facing. Maybe you just need tax filing, if you feel you aren’t taking on too many expenditures yet, or maybe you need ongoing bookkeeping because you just can’t get yourself to manage your books without some help. Know what you need so you know where to look.
See what their clients think about them.
If you’ve started building up a shortlist of accountants, you can start Googling around or searching in Facebook groups to see if anyone in your town has mentioned them before. It’s important to note that not all accountants are CPAs, so not all of them need to be registered. Working with a CPA can be a quick look-up of their license number, but with a regular accountant, it’s especially important to do some digging.
Ask them about their experience, fees, and services.
Get on a phone call or Zoom chat with your account, and get clear on their experience, services, and fee structure. For someone who’ll be working to help you optimize your business’s financial structure, it’s also important that you feel comfortable speaking with them so you know you’ll have a place to go to for questions.
- They have a minimum of 5 years of accounting experience
- They have experience working with business owners like you
- They’re a CPA
How having a good accountant will do wonders for your LLC
You’re excited to get going with your accountant. But wait, if you’re receiving deliverables once a year or once a month— how will they help the day-to-day of your business?
1. Your finances will (finally!) be organized.
Raise your hand if you have an excel graveyard of failed budget-tracking spreadsheets. 🙋♀️ The hours of time you’ve spent trying to find the perfect management method (that probably didn’t work anyway) can finally be put to sleep for good.
“What may seem complicated to you — like figuring out QuickBooks, expense categories, and payroll — is all in a day’s work for a CPA or a bookkeeper,” says content writer and LLC-owner Chaunie Brusie, as she discussed what she wishes she knew before starting an LLC. “Most professionals expect that you will need some help sorting your business out, especially in the beginning.”
And it’s true! Don’t worry if the current financial state is a bit embarrassing. Chances are they’ve seen it before (and maybe even worse), and they’re excited to dig in and help solve your problems.
2. You’ll learn how to manage cash flow specifically for your business.
All the Youtube videos in the world won’t be able to tell you what works for your specific business. Your dedicated accountant will help you set up a budget and track financial records, whether your business is product-based, service-based, or experience-based. If you’re dealing with other business hurdles, like managing debt, deciding whether to get a business loan, finding a business bank account, or trying to understand business jargon or compliance, your accountant can help you there, too. Just make sure you’re clear on their fee structure and how much additional consulting may cost if it’s not already included in your package.
3. You’ll be prepped if you get audited (and won’t be a mess when it happens).
Most people are terrified at the idea of getting audited either because there’s a lot of disorganization or because they’re doing something wrong. Your accountant can help coach you through organizing your income and expenditures so auditing can be simple and painless.
Financial tip: working with a small business formation company like doola will provide you with your own accountant at a flat yearly fee, and includes:
- Monthly transaction categorization
- Business bank and credit card reconciliation
- Monthly financial report packages
- Expertly-reviewed financial reports
- Ongoing customer support
If you want to put your best financial foot forward, then join our community of organized and fearless business owners who are setting their future selves up for success. Set up your LLC today with doola and get everything you need to equip yourself for small business accounting and management.
What is the best accounting method for an LLC?
As a business owner, it’s up to you to decide if you want to use cash accounting or accrual accounting, though the latter (accrual accounting) is more commonly used.
What type of accountant is best for small businesses?
Certified Public Accountants are the most reliable choice because you can look up their number and ensure their legitimacy, while also knowing that they passed the Uniform CPA Examination® before working professionally.
Should I get an accountant for LLC?
It’s up to the business owner to decide whether they need to hire an accountant, but here at doola, we believe setting your business up with an accountant or bookkeeper early is always the best route, especially since it gives you a solid framework to view your growth!
Do I need bookkeeping for my LLC?
You need to have a bookkeeper for your LLC, whether you’ve hired an accountant or whether you’re doing it yourself. Without it, it’s like trying to drive a car without the lights on!