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My wife and I are going to pull the trigger in NYC in the next coming months.

I'm attending a few SBA classes in my area and whatnot. I consider myself very good with money in general, and I typically budget and track my personal finances using YNAB.

That said, do I need an accountant when first starting out? Can I just set up Quickbooks and do it myself? Or are there some functions that realistically only an experienced accountant can do?

Thanks!

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    There's nothing that only an experienced accountant can do, but there are dozens of things you may not realize you need to/should do. I'd say it depends on the nature of your business, for example, the accounting complexity for a retail storefront with employees is much higher than my one-man photography business. – Hart CO Jun 19 '17 at 4:02
  • This question is a perfect fit for the Accounting site (currently a proposal in Area 51: area51.stackexchange.com/proposals/113560/… ) – Jacob Sep 20 '17 at 1:20
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I am perfectly qualified to not use an accountant. I am a business professor, and my work crosses over into accounting quite a bit. I would certainly find a CPA that is reputable and hire them for advice before starting. I know a physicist who didn't do that and found they ended up with $78,000 in fines.

There are a number of specific things an accountant might provide that Quickbooks will not. First and foremost, they are an outsider's set of eyes. If they are good, they will find a polite way to say "you want to do what?!?!?!" If they are good, they won't fall out of their chair, their jaw won't drop to the floor, and they won't giggle until they get home.

A good accountant has seen around a hundred successful and unsuccessful businesses. They have seen everything you may have thought of. Intelligence is learning from your own mistakes, wisdom is learning from the mistakes of others. Accountants are the repositories of wisdom.

An accountant can point out weaknesses in your plan and help you shore it up. They can provide information about the local market that you may not be aware of. They can assist you with understanding the long run consequences of the legal form that you choose. They can assist you in understanding the trade-offs of different funding models. They can also do tasks that you are not talented at and which will take a lot of time if you do it, and little time if they do it.

There is a reason that accountants are required to have 160 semester hours to sit for the CPA. They also have to have a few thousand field hours before they can sit for it as well.

There is one thing you may want to keep in mind though. An accountant will often do what you ask them to do, so think about what you want before you visit the accountant. Also, remember to ask the question "is there a question I should have asked but didn't?"

  • Thanks for the detailed write up Dave! I didn't realize an accountant can do all that. Any advice on finding an accountant? Specifically one working with a small business (or is that the majority of accountants?) – Keith Jun 19 '17 at 18:22
  • Other than you want to make sure they are a CPA, the advice I would give is to ask around. For example, some CPA's only do audit. No one is going to refer you to them. I would ask business owners that you know. You are really looking for one that supports small business owners as their primary line of work. Unfortunately, you won't be able to tell from the sign on the door or the Yellow Pages ad if that is what they do. I would look and see what colleges have a small business laboratory or incubator type arrangement and ask the professors who work there for referrals. – Dave Harris Jun 19 '17 at 21:17
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It never hurts to get professional help when you're starting something new. It would be best to do it right the first time with the help of an accountant because tax laws and business structures can become complex. According to Xero, here are some reasons why you should hire an accountant when starting a small business:

  1. You’ll need advice when you write a business plan.
  2. You’ll need advice about your company’s legal structure
  3. You’ll need an accountant to help with the finances
  4. Hire an accountant when you're ready to delegate

Congrats on starting your own business, it's no small feat. Although Quickbooks definitely can make your life easier, having a CPA to help out along the way wouldn't hurt so that you can learn about the accounting side of a business.

  • Thanks for the insight Michael! It seems using an accountant from the start is the best way – Keith Jun 19 '17 at 18:16

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