Q: Should I employ an accountant full time for my small business or only use them when I need them?
A: During my career, I have seen many companies fail because they did fully understand their “numbers.” In my view, establishing an open and honest relationship with an accountant who will provide analysis and feedback is a critical part of any successful business. That said, whether a business should hire an accountant in-house or outsource the function is largely dependent upon the stage of the business. At ff Venture Capital, we invest in seed and early stage companies that typically do not have accounting as one of their core competencies. Accordingly, we provide outsourced accounting services (at our cost) to a large part of our portfolio. Some of our other early-stage portfolio companies outsource their accounting function to accountants specializing in such companies. Very few do the work themselves. In all cases, the services should include payroll, accounts payable, billing and collections, sales and use tax compliance, financial modeling and strategic advice `– all key to a company’s success. Over time, though, we expect our portfolio companies to outgrow their outsourced solution and to bring the accounting function in-house.