An accounting professional answers FAQs from Canadian small business owners

Small Business Canada

By Paula Festas, CEO at Huumans

A seasoned executive, Paula Festas brings over 25 years of experience and a proven track record of success driving global, high-performing organizations towards profitable partnerships. Currently CEO at huumans, a smart, cost-effective accountancy and bookkeeping service for small business owners, Paula uses her extensive skill set to support SMBs at every stage of their entrepreneurial journey

Cloud accounting software appears to be pretty simple to get the hang of, why do I need to work with an accountant or bookkeeper?

The easy answer: if the term ‘month-end’ sends shivers up your spine, it’s probably time to hire a bookkeeper or an accountant to manage your books. 

One of the greatest technological advancements for small business owners is cloud accounting like Xero; these tools democratized the knowledge required to run a small business, and put the power back into the hands of so many business owners. With that said, most people don’t get into entrepreneurship to spend their time reviewing financial statements. Many people become entrepreneurs because they’re passionate about something and they want to make a living out of it; bookkeeping is just a necessary part of running a business that many people will choose to outsource if they have the option.

Accountants and bookkeepers aren’t much different than any other professional service you would hire, like a hairdresser, a contractor, or real estate agent. You hire these people because they’ve spent time honing their craft, and you can trust them to do a good job. In a world where some small business owners will hire their cousin’s friend’s uncle to do their bookkeeping (nothing against them—we’re sure they’re very nice!) there is undeniable value in hiring a trusted advisor to ensure your books are organized, up-to-date, and not sounding any alarms.

Of course, the decision to bring on an accountant or bookkeeper depends on a lot of variables. Before you make the decision, ask yourself:

  • Is your business full-time, part-time, or a side hustle? If you’re earning under a certain threshold per year, or you’re simply reporting on revenue and expenses, you might be able to get away with using a cloud accounting software. If all your income is coming from your small business it might be worth having a professional take the helm.
  • Would you consider yourself a numbers person? I don’t think you need a finance degree to manage your bookkeeping, but it does help to be comfortable with financial statements, especially when you need deeper insight into your business’ performance. Having difficulty keeping track of bills, invoices, and receipts? You might want to hire a professional.
  • Do you have employees or hire contractors?  If you’re responsible for deducting tax from employees, managing payroll, and distributing tax forms, you’re probably in a situation where you need to outsource your bookkeeping. 

If you consider yourself a little tech savvy and your business’ finances are relatively straight forward, you could get away with managing your books using a cloud accounting software like Xero, but if  you have plans to scale your business or bring on employees, it’s advisable to bring on a professional to make sure you’re covering all your bases. Especially if you’re in a position where you need to make quick business decisions, it can be valuable to bring on a bookkeeper to reconcile your books bi-weekly or even weekly. 

If your needs are a bit more complex, bringing on an accountant might be the best approach. An accountant can prepare P&L statements, tax returns, cash flow projections, business forecasts, as well as provide advisory services for small business owners who are facing anything from applying for a loan, to having conversations about buying or selling a business. On top of that, if you have (or plan to hire) employees, an accountant can get your business set up so you’re paying the correct provincial and federal taxes, insurance, and other deductions, so once tax time rolls around you don’t have any surprises. 

As CEO of huumans, we’re helping break down the barriers small business owners face when applying for loans or credit products.  We’ve seen it first hand: banks can view small business owners and entrepreneurs as “high-risk”, but with an accountant to prepare the financial statements you need, the credit application process becomes more straightforward. We provide clients with an AI-powered small business reporting dashboard that provides real-time and predictive insights about small business health. Through a simple integration with cloud accounting software, the dashboard provides calculations for everything a business owner or advisor needs—from COGS to payroll.

So, to go back to the initial question, cloud accounting platforms are great and many entrepreneurs can—and do—manage their own bookkeeping with ease, but there will always be people who either don’t feel comfortable with this technology, don’t have time to take care of the day-to-day operations, or simply want a professional opinion or an advisor to help them in their small business journey, and huumans is here to support those people every step of the way. 

Disclaimer: This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice.

Leave a Reply

Your email address will not be published. Required fields are marked *

Privacy Preferences
When you visit our website, it may store information through your browser from specific services, usually in form of cookies. Here you can change your privacy preferences. Please note that blocking some types of cookies may impact your experience on our website and the services we offer.