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That is a great and very personal question. A lot depends on your background.
When you go into business, your main objective is to make money.
As you grow, there is more and more bookkeeping and accounting requirements that you have to handle.
A good bookkeeper or accountant is just like hiring additional employees, relieving you of a tack.
I do consulting with Quickbooks which is great accounting software. All my clients have outside or
independent accountants to review the books and records, prepare year end taxes and liaison with bankers.
My words of wisdom to a start-up
entrepreneur would be to have a very good business plan with financial
projections that would indicate that careful thinking had taken
place. Small business owners need to know that it is not a 9:00 to 5:00
responsibility, that there will be long hours. As far as finances are
concerned, a good accountant is the answer.
Good luck, LUCKIEST
A good accountant and accounting software are not the same thing. Accounting software will help you keep the daily records needed for a business. The software will do the job if the person using it has some knowledge of record keeping and what it is intended to do. If you try to use the software without knowing what to do or how to use it you will not get records that are accurate or meaningful.
An accountant is trained in bookkeeping and income taxes and would be the person that helps with porblems with the software and at the end of the month or end of the year uses those records to help analyze the business and prepare the tax returns.
As your business grows you will need both.
I agree with the previous post that it's not an "either/or" question. I think you need an accountant at the point when (a) you have ask - or - (b) you realize that you have better things to do than "accounting" work. Accounting is fairly simple for a new business, and in the early stages you usually have time to handle it yourself. Eventually, however, the process gets more complex, requiring more of your time -- time that could be spent more profitably doing whatever it is you really do to run the business and generate revenue.
There is a good article about accounting software on the homepage. But I'd say a good accountant is needed when your needs are complex. For instance when you have multiple employees, maybe multiple DBA's for your business, when you business does transactions, particularly overseas, etc.
Good software will help and be enough for most businesses.
You raise a good question and from what I have been reading you have received some very good responses. I am going to approach your question from a different perspective. In my business I help start-ups and small businesses to institute a QB software program for their business. However, as already mentioned the program is only as good as the person using the program. I will install the program complete with COA's and provide training. However, I believe it is very ethical to maintain an arms length transaction at year end, and advise my clients to utilize an accountant.
Small businesses need BOTH. I keep QuickBooks and my accountant prepares all tax returns. Even though I can wade through QB theres no way I have the time to re-learn the tax code each year and prepare returns for my businesses as well as my husbands investment and land development partnership.
Anyone that sees the two as one or the other needs to get some serious glasses.
Good accounting software and a good accountant are 2 different needs. The accounting software is needed to record the daily transactions of the business. Once the accounting software is set up the owner or bookkeeper can enter the transactions into the system and the accounting software will prepare prepackaged reports. A good accountant (CPA) will take those transactions and complete your tax returns (TPT, Payroll, Income, etc) and represent you in front of the IRS or other government agencies in the event you are selected for an audit. A good accountant (CPA) can also prepare financial statements for lenders and potential investors. A good accountant (CPA) is also a consultant for your business who usually has years of experience that he/she is willing to share with the business owner. A good accountant (CPA) can perform due diligence when you are looking to acquire another business or major assets. At this time I don't believe any software has been written that can fill the role of a good accountant (CPA).