Doing your own books can help you keep costs down when your business is small. With only a few sales and expenses to track, you can stay close to your finances without adding another monthly bill.
As your business grows, however, the numbers become harder to manage. More invoices, employees, expenses, and tax duties mean more details to keep track of, and bookkeeping can start taking time away from the work that brings money into your business.
So, when should a small business hire an accountant? It may be time when your workload increases, tax rules become harder to follow, or financial records leave you unsure about your next step. Recognizing these signs early can help you protect both your time and your business.
Why Small Businesses Often Handle Accounting on Their Own
Small businesses often handle accounting themselves because startup costs are already high. When sales are limited and finances are straightforward, paying someone else to manage the books may feel like an expense you can avoid while you focus on getting the business established.
Handling the books yourself also gives you direct control over your finances. You can track sales, save receipts, and see where your money goes. When transactions are limited, these basic tasks may take only a few hours each month, leaving you with a manageable routine.
How Business Growth Changes Your Accounting Needs
As your business grows, accounting involves more than recording sales and expenses. More activity means more information to organize, check, and report, and the extra work can quickly add up. You may start noticing these changes in your daily operations:
- Higher Revenue: Revenue can cross tax thresholds, including the $30,000 GST/HST small supplier limit.
- More Employees: Hiring staff adds payroll, source deductions, and year-end T4s.
- New Business Expenses: More expenses mean more categories, receipts, and records to track.
- Multiple Accounts: Several bank accounts, cards and payment apps take more time to reconcile.
- Increasing Transactions: A growing number of transactions can turn a few hours of bookkeeping into several days.
5 Signs Your Business Has Outgrown DIY Accounting
You may have outgrown DIY accounting when keeping your books starts competing with running your business. The work may take longer, mistakes may become harder to catch, or important tasks may keep getting pushed aside. These five signs can help you decide whether you need support:
- Rising Transactions: More sales, invoices, and expenses create more entries and more opportunities for mistakes.
- Cash Flow Issues: You may show a profit on paper but still struggle to cover bills when they arrive.
- Missed Deadlines: GST/HST returns, payroll remittances, or other filings may slip past their due dates.
- Financial Confusion: You may struggle to explain what you earned, owe, or can safely spend.
- Limited Time: Bookkeeping may keep taking time away from customers, sales, daily operations, and family.
When Tax and Compliance Responsibilities Require More Expertise
As your business grows, tax filings and compliance deadlines can become harder to manage. Corporations must file a T2 return within six months of their fiscal year-end, while GST/HST returns, payroll remittances, and year-end slips follow their own schedules. Keeping track of each deadline takes careful attention.
Missing a deadline can lead to extra costs, especially when tax remains unpaid. The CRA’s late-filing penalty is generally 5% of your balance owing, plus 1% for each full month, up to 12 months. Accurate financial records also help support deductible expenses and keep proof available when needed.
Should You Hire an Accountant Based on Cost or Business Value?
An accountant’s fee is only one part of the decision. You should also consider how much time bookkeeping takes, what you could do with those hours and whether mistakes or missed deadlines are costing your business. Looking at the full picture helps you weigh the expense against the support.
For example, spending 10 hours a month on bookkeeping adds up to 120 hours a year. That time could go toward customers, sales, or business growth instead. Professional accounting and bookkeeping support can also help you understand your finances when making decisions about hiring, pricing, and spending.
Explore Robertson CPA & Find the Right Accounting Support for Your Small Business!
Managing your own books can work well while your business is small. But when transactions increase, tax responsibilities grow, or bookkeeping starts taking over your schedule, professional accounting support can take some of that pressure off and give you more time to focus on your work.
Robertson CPA Professional Corp supports Ontario small businesses with bookkeeping, payroll, GST/HST, and CRA filings. Whether you need help keeping records organized or managing tax responsibilities, you can find support for the financial tasks that keep your business running.
You started your business to build something of your own, not to spend your free time sorting receipts or worrying about deadlines. If the books are taking more time and energy than you can spare, you don’t have to keep handling everything alone. Contact Robertson CPA Professional Corp to discuss the support your business needs and make more room for the work you enjoy.
Frequently Asked Questions (FAQs)
Q1. When does a small business need an accountant?
A small business may need an accountant when transactions increase, tax filings become harder to manage, or bookkeeping takes time away from daily work. Hiring employees, reaching the $30,000 GST/HST threshold, or struggling to keep financial records organized can also signal that support may help.
Q2. What does an accountant do for a small business?
An accountant can help maintain accurate financial records, prepare financial statements, manage tax filings, and track CRA deadlines. Depending on your needs, they may also handle payroll and GST/HST returns, giving you a clearer picture of your business finances throughout the year.
Q3. Can you do your own bookkeeping and hire an accountant only for taxes?
Yes. Many small business owners manage daily bookkeeping themselves and hire an accountant for tax filings, year-end work, or financial statements. This lets you continue handling routine records while getting professional help with tasks that require more time or specialist knowledge.
Q4. What happens if a small business misses a CRA deadline?
Missing a CRA filing deadline can lead to penalties and interest. The late-filing penalty is generally 5% of the balance owing, plus 1% for each full month, up to 12 months. Interest may also apply to unpaid tax until the balance is paid.