Do Small Businesses Need an Accountant?

Running a small business comes with many financial responsibilities. From managing daily expenses to filing tax returns, it can quickly become overwhelming. Many business owners try to handle everything on their own but without the right financial knowledge, mistakes happen. Simple errors can cost time and money, and in some cases, lead to non-compliance with tax laws.

Hiring an accountant is one way to ease the burden, but it does come at a cost—something many small businesses are understandably cautious about. With tight budgets and competing priorities, it’s natural to question whether bringing in professional help is truly necessary.

So, do small businesses need an accountant? In this post, we’ll explore why an accountant can be a smart investment for your business and how to determine if it’s the right move for you.

What Does an Accountant Do for a Small Business?

A professional accountant offers far more than just help with taxes. Small business accounting services cover a broad range of financial support, including bookkeeping, cash flow management, budgeting assistance, financial reporting, and analysis. They can also handle Business Activity Statement (BAS) lodgement, set up and manage payroll, and provide strategic financial planning.

By working with an accountant, you can ensure your financial records are accurate, your reporting is up to date, and your tax obligations are met. More importantly, a good accountant helps you understand your financial position and offers practical advice to improve profitability and support long-term business growth.

Do You Need an Accountant, Bookkeeper or Both?

Bookkeepers and accountants perform different but complementary roles. A bookkeeper records daily transactions, reconciles bank accounts, and keeps financial records organised. An accountant reviews this data to offer insights, prepare tax returns, and support business decisions.

If your business is small and has a manageable number of transactions, a bookkeeper might be enough to start. However, as your business grows, hiring an accountant becomes essential. For the best outcome, many small businesses work with both. Bookkeepers manage the day-to-day, while accountants handle long-term strategy and compliance.

Key Benefits of Hiring an Accountant for Your Small Business

1. Accountants ensure your financial records are accurate, up to date and lodged on time. They understand tax laws and ATO requirements, so you stay compliant.
2. Handling finances takes time. If you're spending hours on spreadsheets and tax forms, you're not focusing on your business. A small business accountant takes this off your plate so you can focus on growth and operations.
3. Tax preparation for small business goes beyond submitting your return. An accountant helps you plan ahead, identify deductions, and implement tax-saving strategies. They know what you can claim and when.
4. Whether you're looking to expand, apply for funding, or improve profits, your accountant can guide your financial strategy.

When Should a Small Business Hire an Accountant?

You don’t have to wait until your business is large to hire an accountant. Here are key moments when an accountant can give you an edge:

• When you're starting a business and need help choosing a structure
• When your revenue starts to grow and financial management becomes complex
• When you hire staff and need payroll support
• When it’s time to file tax returns or lodge BAS
• When you apply for a loan or seek investors
• When you're planning to scale or sell the business

At each stage, small business accounting services add value and help you make informed choices.

Common Myths About Hiring an Accountant

Myth 1: Accountants are too expensive.

Truth: The cost of mistakes is often much higher than the cost of hiring a professional. An accountant can actually save you money through better tax planning and avoiding fines.

Myth 2: My business is too small.

Truth: Even sole traders benefit from accounting advice. Accurate financial management is crucial no matter the size of your operation.

Myth 3: I can do it all myself.

Truth: You can, but it’s time-consuming and risky. Financial management requires expertise. Working with a small business accountant gives you peace of mind and better results.

How to Choose the Right Accountant for Your Small Business

Choosing the right accountant is critical for the success of your small business. The right professional can provide essential support and guidance, so it’s important to take the time to find someone who fits your needs.

Start by checking their qualifications. Look for registered tax agents or certified practicing accountants (CPAs) to ensure they meet industry standards. It's also helpful to ask about their experience with businesses similar to yours. This can give you confidence that they understand the challenges and requirements of your specific industry.

Review the services they offer to make sure they align with your business needs. Whether you require help with BAS, tax returns, payroll, or business strategy, ensure the accountant provides the exact support you’re looking for.

Consider their familiarity with cloud accounting tools such as Xero or MYOB. An accountant who is well-versed in these platforms can help streamline your systems and improve efficiency. Discuss their fee structure upfront so there are no surprises later. Understand whether they charge by the hour, offer a fixed fee, or provide packages—and be clear on what’s included in their pricing.

Lastly, make sure communication is smooth. A good accountant should be able to explain things clearly and respond to your queries in a timely manner.

FAQs About Small Business Accounting

Do you need an accountant if you have a small business?

While it's possible to manage your finances on your own—especially with the help of accounting software—doing so can be time-consuming and risky. An accountant not only ensures you're meeting your tax obligations but also offers valuable financial guidance and – most importantly – allows you to focus on your own tasks.

Do small companies need an accountant?

Small businesses face many of the same financial challenges as larger ones. A small business accountant helps manage cash flow, taxes, keep on top of payroll, and plan growth.

Can you do business without accounting?

Technically, yes—but it's risky. Without proper accounting, you can’t measure performance, prepare for tax time, or plan for the future effectively.

What’s involved in small business accounting?

It includes tracking income and expenses, preparing financial reports, lodging BAS and tax returns, handling payroll, and offering strategic advice to improve business financial management.

An accountant is more than a number cruncher. They are a trusted advisor who helps you manage risk, save time, reduce tax, and grow your business. Whether you’re a start-up or an established business, working with a qualified accountant for small business gives you confidence in your finances and peace of mind during tax time.

The benefits of hiring an accountant are clear and your business deserves the best chance to succeed. If you're ready to take control of your finances, contact us today at Darcy Bookkeeping and Business Services or call us on 1300 728 875.