When Is It Time to Hire an In-House Accountant..

When Is It Time to Hire an In-House Accountant?

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As you’re growing your business, there are two main hurdles to jump when it comes to accountants. The first is when it’s time to outsource your accounting. The second is when it’s time to bring a full-time accountant in-house. While these two situations sound very similar (and they sort of are), they’re actually very different. So, it’s important to be aware of when each should occur. Implementing the wrong scenario at the wrong time, can lead to unpaid tax men, vendors, and employees knocking at your door. Today, we’re going to cover the latter hurdle: How to determine when it is time to bring on a full-time accountant as an employee.

Outsourced accounting may be all your business needs for years. In fact, it might be the only accounting you’ll ever need if your company stays relatively small and uncomplicated. However, there are some very obvious indicators that show when it’s time to upgrade:

  • Is your company growing quickly?
  • Are you arranging complex financial deals with banks, alternative lenders, etc. to bring in more cash flow?
  • Do you overload your current accountant and often find yourself thinking that you could use someone that is more dedicated to your specific needs?

Based on the fact that you read the title of this post, and you’re now two paragraphs in, it’s probably safe to assume you answered “yes” to at least one of these questions.

First let’s decide what you actually need to bring in-house

When it comes to accounting services for small businesses, it’s important to differentiate between the need for a bookkeeper and an accountant. Maybe you don’t need a full-fledged accountant on staff. Maybe what you’re looking for is an accounting clerk or bookkeeper. These positions require a little less general knowledge than a high-pedigree accountant.

So, what’s the difference?

To start, most accountants have logged roughly 120 hours of college credits. Most of them have gone on to earn a certification from their state such as their CPA (Certified Public Accountant). These are the individuals who can do the highly technical and complex accounting and finance work such as analysis and SEC reporting. Bookkeepers, on the other hand, are more focused on “running” your books. They manage the day-to-day transnational accounting for your company. They aren’t the ones to provide services such as growth strategy, financial strategies, lending solutions, financial policy advice, and so on.

Now, let’s talk about some milestones. Most small businesses can start out with a basic bookkeeper; someone that will ensure everything is running smooth as far as payroll, AP, AR, etc. But, once you hit some key milestones, it would be wise to climb the accounting food chain and bring a specialist on board.

Is your company structure getting complicated?

When your business was just starting out, you were a one-person wonder! And I can almost bet that to make things simple, and because you really didn’t know how else to do it, you formed your company as an LLC. Don’t get me wrong, there’s nothing wrong with that. It’s just that now you have investors that want to give you funding, employees you may want to issue shares or options to, or maybe it’s time for a jumbo loan from the local bank. The point is, when things start getting complicated, it becomes too much for you to stay on top of. The path gets a little muddy if you’re not careful. Enter a good in-house accountant who can be your guide as you navigate the financial maze that lies ahead, particularly making sense of your tax obligations and strategies.

*TIP* Keep this in mind when you’re hiring a full-time accountant: Their value is in helping you with the financial strategy of your business. You’re not looking for someone to simply come in and update the books or remind you to ask your clients about their overdue payments. If that’s what you need, hire a bookkeeper.

Are you making a lot of money?

While it seems like common sense when you think about it, but one major factor that seems to be forgotten in the decision making process for hiring an accountant, is how much money your business is actually making. The idea is this: The more money you earn, the more money you need to keep track of. Is your money coming from multiple countries? Is it coming from multiple business entities? Bottom line: if there’s a lot of it coming in, and it’s coming from many different places, that means it’s time to hire someone to help you keep track of it.

I already know you’re thinking, “how much is considered a lot.” The answer is: It depends. Some companies won’t feel the pain of keeping everything in line until they’re pulling in well over $1 million. Just keep this in mind: A good accountant will run at least $75,000 USD per year on average. So, if you don’t want half your income going to an accountant, that means you’re probably not quite there yet.

And speaking of a typical accountant’s salary, that brings us to our final point.

How much are you spending on outsourced accounting now?

If you’re spending $70,000 USD or more with your external accounting firm, that’s probably a good sign your business is big enough and complex enough to hire someone in-house. Spending just a little more will enable you to get the more personalized service and dedication that comes with an employee as opposed to an external service provider. Keep in mind though,the benefits of in-house accounting will be a little jump for you price-wise. You should plan on an extra 20% to cover the cost of benefits in addition to the salary you’ll pay.

Again, switching from an outsourced accounting firm to an in-house accountant really is a case-by-case decision. If you strongly believe your current relationship is perfect, and you’re happy with the way things are going, by all means, stay where you are. But if things are getting expensive, and you’re not feeling the benefits match what you’re paying, it may be time to make the jump.

Some last thoughts

I’ve said it once, I’ll say it again. The decision is really up to you. You’re the one that knows your business best. Simply follow the guidelines above, and you’ll know when it’s the right time!

Maintaining a Long Term Strategy That's Right for....

Maintaining a Long Term Strategy That’s Right for Your Small Business

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Below are a few considerations for maintaining a long term strategy in your small business.

 

When in doubt, remember your value proposition

From a broad perspective, business strategy is: “A long-term plan for growth and profitability,” according to the Harvard Business Review. It can be easy to get distracted from the plan and not keep your metaphorical eyes on the prize. Many growing companies find themselves with competing priorities and initiatives. For example, diversification of a product line may be a profitable goal. Diversifying your offerings, however, can make you distracted from core company competencies and stretch resources too thinly. This can result in your team finding it difficult to reach their original goals. Your long-term strategy should mesh with the vision or mission that made you want to start your business and the overarching value you provide customers.

Build on core competencies

Recognize and understand your company’s core competencies — knowing these can help you deliver new products your customers want.

For example, your core competency is making pizza and “going vegan” becomes a rising trend in town. Perhaps you can start offering vegan options to serve customers effectively. If serving health-conscious customers is a core competency, then adding gluten-free options may be a way to provide more options for customers. Ignoring your core competencies to branch out into a new offering may be successful. It can also be a harder road for your company to travel and harder for customers to accept.

Be nimble and fluid

Smaller firms have the ability to pivot quicker than large firms. Markets change, new competitors arise, technology impacts how you run your business, and your customers’ tastes change over time.

Analyzing sales data, utilizing industry research and soliciting customer feedback regularly can help inform what initiatives are driving your business today. As external changes begin to effect your business, if your strategy is based on the value you’re bringing customers, making changes to your business can be less of a disruption and more of a rapid adaptation.

Establish a Cyber Attack Response Plan for Your Business

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More than ever it is important to have a cyber attack response plan in place.

HBO’s high-profile cyber attack in July resulted in the personal information of Game of Thrones actors being leaked online, as well as scripts and episodes of unreleased shows being leaked. In total, hackers reportedly stole 1.5 terabytes of data from HBO. The hackers also demanded that HBO pay to prevent more information from being leaked. So, while a cyber attack or data breach sounds like a CEO’s worst nightmare, there are many ways to help reduce the possibilities of it happening to your company.

Establish cyber security policies

Depending on what state (or states) you do business in, the potential legal obligations if your firm experiences a breach can differ. “Companies that do business nationally may have to comply with as many as 46 different state laws,” according to Entrepreneur. “You also could face liability lawsuits from affected parties”. Understand what your legal obligations consist of and consider cyber-insurance if you feel it is warranted.

Make understanding potential security risks part of on-boarding new employees. It is also a good idea to provide periodic training and updates for existing employees, as it suits their role in the company. Employees who regularly use company computers and software can become targets for phishing scams and malware attacks.

Enlist your technology providers and IT department in keeping your employees up to date as well. New kinds of cyber threats happen, so make sure your employees know what to look out for.

What to do if it happens

If by chance your company faces a security breach the first thing to do is to understand and contain it. For example, you notice that a specific set of files has been accessed. Make sure to investigate the extent of the breach and increase security on other files. Try adding extra layers of encryption or taking them offline temporarily. Make sure your internal IT teams work to contain the breach, and have external experts audit your systems to determine what has been compromised.

Notify customers, employees and partners once you learn specifically what data has been compromised. Communicate what data was lost, how the situation is being controlled and what your customers may need to do.

Depending on your company’s resources and number of customers, it may take time to reach every person and/or company affected. One way to do this proactively is to put out a press release that addresses the issue and provides links to FAQs about the breach for customers. You should also create an internal FAQ for staff members who will likely have to answer your customers’ questions.

To maintain trust, it can be necessary to be transparent with the public about the breach. It is also important to emphasize the strict measures your company takes to safeguard against such breaches in the future.

Tips for Growing Your Business’ Instagram Following

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Below are three tips for growing your business’ Instagram following.

 

Know Your Brand’s Social Identity

Before you can begin racking up Instagram followers, the first step is to figure out your brand’s social identity. After all, if you don’t know what your brand is about online, how will your followers? Ask yourself, if my brand were a person, what would he or she be like?” Use the answer along with a profile of your key customers — as the starting point to begin to figure out what your brand should look, sound, and feel like on social media.

Continuity is key when it comes to building a social strategy. Decide how often you’ll post, and plan content in advance. For most businesses, one post per day is more than enough. Mix in videos and photos to keep content interesting — especially if you’re making your posts shoppable. Keep short (your photos or videos should speak for themselves), use no more than two hashtags in your copy, and use similar filters and colors for every post to hone your brand’s look.”

Keep in mind that, as with most new platforms, Instagram regulations are ever-evolving. The FCC has issued guidelines on rules brands should follow when engaging with influencers and celebrities. All entrepreneurs should familiarize themselves with current regulations before engaging in influencer campaigns to ensure all regulatory guidelines are being followed.

How to use Hashtags on Instagram Without Being #Annoying

Hashtags can be a great way to grow your following organically, invite your customers into a conversation and weigh in on topics; however, used incorrectly, hashtags can make your team look like social-media novices… Or worse, #thirsty for attention.

Generally speaking, there are two types of hashtags: community hashtags, which are used to catalog posts by topic (#food), and brand hashtags, which are unique to your company and designed to engage consumers in conversation or promote a marketing campaign (#yourbrandtag). Your brand hashtag can be used in every post, along with one or two community hashtags. Use a service like Hashtagify to research and track the most effective tags. To invite even more Instagram non-followers to find your content, comment on your original post with up to 10 additional community hashtags. Including these as a comment instead of with your original post will still lead new users to your account, but without your original post looking like a minefield of hashtags. This will allow your social identity to take center stage.

How to win over Competitors’ Followers

When you’re trying to build your Instagram following, one of the first places you should look is at your competitors’ social accounts. Do their businesses have more followers than yours? If so, what are they doing differently to engage fans?

Take note of the hashtags your competitors use, and begin to incorporate them (appropriately!) into your own posts. Look at the public profiles of your competitors’ followers. Like posts that are relevant to your brand, and comment when it feels appropriate and organic. For example, if you operate a sporting goods store, you might comment on how delicious a user’s campfire meal looks. You can also make special offers: if you operate a restaurant, you can search #food in your zip code and comment, “looks delicious, but we think you’ll love our breakfast even more! Come visit us any time this week and save 15% off your bill when you show this post.”

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