Like many business decisions, to answer “yes” or “no” to the question of whether you need to hire an accountant means weighing your personal disposition against available resources. At the end of the day, it’s your money and your risk.
According to Jeanie June Balunan, a supervisor at KPMG Manabat San Agustin & Co., hiring an accountant becomes more imminent as a business grows—with higher tax rates and more complex guidelines to follow.
How do you find an accountant?
Start with your own circle and network. Getting someone you trust with your financials is a big part of having a good professional relationship with your accountant.
If none are available, looking for one from an established firm is the next best step. Inquiring on the phone is an easy and convenient way to list possible candidates for the job.
A simple search on the Internet is enough to gather reliable information for what you need.
When to hire an accountant? Check your annual income.
Businesses can hire accountants on a consultancy basis or full-time. The choice to hire an accountant greatly depends on the size of the company, says Balunan.
Your answer to the question of whether you should hire an accountant should be based on these ranges of annual income:
- If your annual income is PHP0-PHP90,000, no, you don’t need an accountant.
- If your annual income is PHP100,000-PHP900,000, hire an accountant on a consultancy basis.
- If your annual income is P1 million and above, yes, you need one.
When to hire an accountant all depends on where you stand at the moment. The businesses of Dr. Custer Chan, the owner of several mid-scale businesses in Pasay, and Roma Regala, the owner of Ananda Kanani Accessories, are two case studies we can examine.
Do it yourself: Don’t hire an accountant
Ananda Kanani is a small accessories company that sells handmade necklaces, bracelets and earrings, both online and as a concessionaire in a shop in Cubao Expo. The business is a relatively new one that makes less than P20,000 annually.
This is a small-scale business that does not require an accountant because there is very little to account for. Products from the store have been worn by a few celebrities, and sales have been steady, but the business, according to Balunan, is not in need of any external help to keep its books organized.
As long as the owner has basic knowledge of proper pricing and costing, her chances for gradual business growth will be good.
Hire on a consultancy basis
Dr. Chan started out by leasing a single commercial building in Pasay in 2004. According to Dr. Chan, he only hired accountants on a consultancy basis at the beginning of his business venture. They mainly served as book-keepers and overlooked the process during tax season. The commercial building was making PHP480,000 (before taxes) annually. He has one accountant working on his financials quarterly.
Balunan considers the annual income of PHP480,000 on the medium scale. In fact, anything below PHP1 million belongs under that category. Since business tax guidelines for mid-scale companies don’t demand a full-time accountant to be there every day, allocating a fraction of your expenses for a part-time accountant should be enough to keep things in order.
Hire an accountant full time
Once your business hits the million mark, Balunan says hiring a professional to do your books and taxes on a regular basis becomes a must. Tax percentages change, which means there are adjustments that need to be supervised meticulously to avoid BIR infractions or mistakes in projections.
More importantly, accountants that are hired full time automatically serve as business advisors. Remember that as the owner of your company, your attention is needed on all aspects of business. Focusing on just the financials is counter-productive and is highly stressful for people who don’t have the technical know-how to crunch numbers.
Furthermore, as your business grows, so will your network of professional relationships with lawyers, bankers, and more. Having an accountant to properly communicate what your business needs is one way of avoiding breakdowns in your strategies to elevate your company.
Keep your financials under your control
Balunan reminds business owners to never give full control of financial decisions to accountants. Even if one has hired someone on a full-time basis, this doesn’t mean that business owners can completely leave all decisions to the accountant.
The important thing is to be present and learn the process as you go along. Wiser decisions are made when one knows the ins and outs of accounting.